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12.02.2024 Market Report


EUR/USD is holding gains below 1.0800 amid caution trading in early Europe on Monday. Traders resort to readjusting their US Dollar positions ahead of Tuesday’s US CPI data, lending some support to the Euro. Speeches from ECB and Fed officials will be eyed. 


GBP/USD consolidates within a narrow trading range below 1.2650 in European trading on Monday. The pair turns cautious alongside risk sentiment, as traders await BoE Governor Bailey’s speech ahead of top-tier UK/US data in the week ahead. 


The US Dollar Index (DXY) is slightly up from last week’s closing price as Federal Reserve (Fed) policymakers lean towards holding interest rates restrictive for longer. On Thursday, Boston Federal Reserve Bank President Susan Collins said the central bank needs to be sure about strength in the labor market and progress in inflation declining towards 2% before adopting an expansionary policy stance.


The AUD/USD pair remains on the defensive during the early Asian session on Monday. The markets are closed in China for the Lunar New Year holidays. Amid the quiet session in Asia, traders will focus on the risk sentiment in the new week. Later this week, the US Consumer Price Index (CPI) for January will be due. At press time, AUD/USD is trading at 0.6520, losing 0.07% on the day. 


NZD/USD retraces its recent gains observed on Friday, trading lower near 0.6140 during the Asian session on Monday. Despite the subdued US Dollar (USD), the NZD/USD pair experiences a decline due to the Reserve Bank of New Zealand (RBNZ) Overnight Indexed Swap (OIS) rates continuing to pare Friday’s post-ANZ forecast firming.


USD/CAD moves sideways on Monday after witnessing a volatile session on Friday. The pair hovers around 1.3460 during the Asian session. The decline in Crude oil prices might have weighed on the Canadian Dollar (CAD), given the fact that Canada is the largest oil exporter to the United States (US).


USD/CHF retraces its recent losses as the US Dollar (USD) strengthens amid heightened geopolitical tensions in the Middle East. Last week the pair oscillated between 0.8740 and 0.8749.


Oil prices fell in early Asian trade on Monday after Israel said it had “concluded” a series of strikes in southern Gaza, slightly easing concerns about supply from the Middle East.


Gold price extends its consolidative range bound price action heading into the European session on Monday and is placed just above the monthly low touched last week. The Fed rate cut uncertainty keeps the USD bulls on the defensive and lends support to the metal.

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