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23.04.2024 Market Report


EUR/USD remains on the back foot near 1.0650 in European trading on Tuesday. Resurgent US Dollar demand amid a cautious risk tone weighs on the pair. Investors stay wary ahead of the preliminary Eurozone and US business PMI data. 


GBP/USD is dropping below 1.2350 in the European session, as the US Dollar sees fresh buying interest on tepid risk sentiment. The further downside in the pair could remain capped, as traders await the UK PMI reports for fresh trading impetus. 


The Japanese Yen (JPY) struggles to capitalize on a modest intraday uptick against its American counterpart and hangs near a multi-decade low heading into the European session on Tuesday. The Bank of Japan (BoJ) indicated that it is in no rush in terms of policy normalization, while the Federal Reserve (Fed) is expected to keep interest rates higher for longer amid sticky inflation. This, in turn, suggests that the large gap in interest rates between the US and Japan will stay for some time, which, along with a generally positive risk tone, fails to assist the safe-haven JPY to attract any meaningful buyers. 


The Australian Dollar (AUD) continues its upward trajectory for the second consecutive session on Tuesday, buoyed by improved risk appetite. This positive sentiment follows a relaxation of geopolitical tensions in the Middle East, as indicated by an Iranian official’s statement last week, suggesting no immediate plans for retaliation against Israeli airstrikes, as reported by Reuters.


The NZD/USD pair moves slightly lower to near 0.5920 during the Asian session on Tuesday. The New Zealand Dollar (NZD) found support from an improved risk appetite, bolstering the NZD/USD pair. This positive shift follows reduced geopolitical tensions in the Middle East, as highlighted by an Iranian official’s recent statement indicating no immediate plans for retaliation against Israeli airstrikes, as reported by Reuters.


The USD/CAD pair extends its downside near 1.3695 despite lower crude oil prices. However, the downside of the pair might be capped by strong US economic data and the Fed’s hawkish comments. Investors will keep an eye on the US S&P Global Purchasing Managers Index (PMI) ahead of US Gross Domestic Product (GDP) and US Core Personal Consumption Expenditures (PCE) later this week. 


The US Dollar consolidates near highs with bears contained at 0.9075. Easing geopolitical fears and monetary policy divergence are weighing on the Swiassie. USD/CHF is at 0.9075 is closing the path towards the key 0.8980 – 0.9000 area. The US Dollar regained lost ground on Friday, following a risk-averse reaction to Israel’s drone attack on Iran, and the pair has remained consolidating on Monday, with bears contained above 0.9075.


Oil prices rose from recent losses in Asian trade on Tuesday, buoyed by the prospect of potentially tighter supplies in the coming months, even as easing tensions over an Iran-Israel war saw traders price out a risk premium in crude. 


Gold price sees a fresh leg down in Asia on Tuesday even as risk flows dissipate. Receding fears over Middle East escalation offset subdued US Dollar and Treasury bond yields.

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