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15.12.2023 Market Report


EUR/USD remains sidelined in the European morning on Friday, awaiting the Euro area business PMIs for fresh impetus. The divergent ECB-Fed policy outlooks stay supportive of the Euro while the US Dollar consolidates losses ahead of US PMI data. 


GBP/USD is paring back gains to trade modestly flat near 1.2750 in early Europe on Friday. The pair is holding its weekly gains, supported by a hawkish BoE outlook and a dovish Fed pivot. Focus shifts toward the preliminary UK/ US PMIs.  


The USD/JPY edges down following Wednesday’s Federal Reserve’s (Fed) decision, which sent US Treasury yields plummeting alongside the Greenback. Fed’s adopting a dovish stance is the main reason for the pair to print losses of 0.68%, as it trades at around 141.89.


The AUD/USD pair hovers around 0.6700 during the early Asian session on Friday. The pair trades in positive territory for the third consecutive day as the US Dollar loses momentum. That being said, the dovish remarks from the Federal Reserve (Fed) after the Fed monetary policy meeting exert some selling pressure on the USD and create a tailwind for the AUD/USD. At press time, the pair is trading at 0.6698, down 0.04% on the day.


The NZD/USD pair snaps the four-day winning streak during the early Asian session on Friday. The weaker-than-expected New Zealand GDP growth numbers weigh on the Kiwi and create a headwind to the NZD/USD pair. The pair currently trades near 0.6198, losing 0.21% on the day. The Federal Reserve (Fed) decided to keep rates unchanged again at 5.25%–5.50% on Wednesday. During the press conference, Fed Chair Jerome Powell said that there was a lot of uncertainty and the central bank needed to see further progress. Powell added that they do not want to rule out the possibility of further hikes, even though Fed policymakers projected at least three rate cuts next year.


USD/CAD extends its losses on the third successive day, trading lower around 1.3390 during the Asian session on Friday. The USD/CAD pair faces challenges on the subdued US Dollar, which could be attributed to the lowered US Treasury yields.


USD/CHF moves on a downward trajectory for the fifth successive day, trading around 0.8661 during the Asian session on Friday. On Thursday, the USD/CHF pair recovered some intraday losses after dropping to a five-month low at 0.8630. The Swiss National Bank (SNB) has chosen to maintain the key policy rate at 1.75% on Thursday, citing a noticeable downward trend in domestic inflation.


Oil prices rose slightly in Asian trade on Friday, and were set to snap a seven-week losing spree on optimism over interest rate cuts by the Federal Reserve and a positive outlook on demand from the International Energy Agency.


Gold price is seen consolidating its weekly gains registered over the past two days. Rebounding US bond yields and a positive risk tone act as a headwind for the metal. The Fed’s dovish tilt, along with sustained USD selling, continue to lend support.

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