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10.01.2024 Market Report


EUR/USD is trading on the defensive above 1.0900 in early European trading hours on Wednesday. The pair is undermined by a cautious market environment and a steady US Dollar, as geopolitical tensions and prudence ahead of Thursday’s US inflation data persist. 


GBP/USD is struggling near 1.2700 in the European morning on Wednesday. A risk-off market mood and the latest US Dollar upswing weigh on the pair, as traders look to BoE Governor Bailey’s testimony later in the day. 


The USD/JPY posted decent gains late in the North American session, courtesy of risk aversion as investors shrug off economic data from Japan. The major is trading at 144.55, gaining 0.23%.


The AUD/USD pair consolidates above the 0.6700 mark during the early Asian session. The speculation that the Federal Reserve (Fed) may not cut their policy rate as quickly as previously expected lends some support to the US Dollar (USD) and weighs on the pair. Investors await the US Consumer Price Index (CPI) data later this week for the near-term catalysts. At press time, AUD/USD is trading at 0.6719, gaining 0.01% on the day.


NZD/USD attempts to recover the recent losses registered on Tuesday, trading slightly higher near 0.6240 during the Asian session on Wednesday. The New Zealand Dollar (NZD) registered losses against the US Dollar in the previous session as the risk-on sentiment shifted to risk aversion. Traders are now looking ahead to Thursday’s release of November’s Building Permits data from New Zealand, following a reported 8.7% rise in October.


The USD/CAD pair attracts some dip-buying on Wednesday and stalls its retracement slide from a near three-week high – levels just above the 1.3400 mark touched the previous day. Spot prices stick to modest intraday gains through the early European session and draw support from weaker Crude Oil prices, which tend to undermine the commodity-linked Loonie. Saudi Arabia’s decision to slash the official selling price (OSP) for February-loading Arab Light to Asia to the lowest level since November 2021 raises concerns about sluggish fuel demand. Adding to this, other Middle Eastern and African countries increased production in December, offsetting supply worries stemming from escalating geopolitical tensions in the Red Sea. This, in turn, continues to weigh on Crude Oil prices for the second successive day, which, along with a modest US Dollar (USD) uptick, acts as a tailwind for the currency pair.


USD/CHF stays calm after gaining profits in the previous session, hovering near 0.8520 during the Asian session on Wednesday. The US Dollar Index (DXY) maintains its position above 102.50 amid steady US bond yields, with the 2-year and 10-year yields standing at 4.35% and 4.02%, respectively.


Oil prices advanced in Asian trade on Wednesday, extending a recent rebound as signs of supply disruptions in the Middle East persisted, while industry data pointed to another week of sharp builds in U.S. product inventories.


Gold price met with some supply following an uptick to the $2,040 area on Tuesday and finally settled with only modest gains on Tuesday. The precious metal continues with its struggle to gain any meaningful traction. 

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