GBPUSD – BoE’s Haskel: Waiting for Further Signs of Easing Inflation Risks
BoE Governing policymaker Jonathan Haskel said inflation in the UK is a slowdown, but still, a long way to reach our target. Until rates are higher in the market.
GBPUSD is moving in the Box pattern and the market has rebounded from the support area of the pattern
– BoE policymaker Jonathan Haskel notes signals of potential easing in Britain’s inflation pressures.
– He expresses encouragement but emphasizes the need for further evidence before considering a change in his view.
– Haskel highlights the importance of persistence in monitoring inflation trends.
– While acknowledging positive signs, he stresses the requirement for more conclusive indicators.
– Haskel is open to altering his vote based on accumulated evidence of inflation trends.
– He underlines the challenge of specifying a timeframe but underscores the focus on underlying indicators.
– Reflecting on the past turbulent six years, Haskel acknowledges the economy’s resilience despite various challenges, including Brexit and political changes.
BoE’s Mann: Skeptical About Sustained Near-Term Inflation Slowdown
The Bank of England policy maker Catherine Mann said inflation is cooling down by monetary policy settings, but it is affected by RED Sea conflicts, Corporate pricing of goods will be higher due to shipping costs. So the UK Public is affected by financial conditions.
BoE’s Mann, a recent rate hike supporter, expressed skepticism on the sustained near-term slowdown in headline inflation, citing concerns about a rapid incorporation of a Red Sea price shock into corporate pricing. Additionally, she argued that financial conditions in the UK eased too much.
GOLD – Prices Extend Range Amid Uncertainty on Fed Rate Cut Path
Gold prices have moved in consolidation after the hawkish speech from FED members in recent days. Richmond FED President Thomas Barkin said inflation numbers are still a way to go and we will keep patience until reach the reading.
XAUUSD is moving in an Ascending triangle pattern and the market has reached the higher low area of the pattern
Gold struggles to gain traction amid a familiar trading range, influenced by stronger US macro data and hawkish comments from FOMC members, signaling a longer-lasting higher interest rate stance by the Federal Reserve. The ongoing risk-on sentiment in global equity markets acts as a headwind for the safe-haven metal.
The US Dollar (USD) maintains a consolidative move below its three-month high, as uncertainty about the Fed’s rate-cut path restrains aggressive trading around gold. Traders await the release of US consumer inflation figures for insights into the Fed’s 2024 rate-cut timing and pace, which could impact USD demand and provide momentum for the precious metal.
Market Movers: Gold Price Stalls, Traders Await Fed Rate Cut Clarity
Strong US macro data and hawkish Federal Reserve comments lead investors to reduce expectations for significant rate cuts, creating headwinds for Gold. Fed Chair Jerome Powell’s statement on Sunday dashed hopes for a March rate cut, and Richmond Fed’s Thomas Barkin emphasized the need for sustained and broad inflation.
Despite the 10-year US government bond yield staying above 4.0%, Gold faces pressure, but a subdued US Dollar tempers the downside.
XAGUSD Silver price is moving in the Box pattern and the market has reached the support area of the pattern
Traders await US consumer inflation figures next week for insights into the pace of 2024 rate cuts, providing a potential directional boost for Gold. Despite modest weekly losses, the metal remains within a cautious, multi-week-old trading range since the start of the year.
USDCHF – Strengthens Amid Middle East Tension, Dips Near 0.8740
The US advised Israel of improper planning of missile launch in the Rafah area yesterday without informing to US. This could lead to Disaster. Hamas Groups went to Cairo for the smooth stopping of the war with the help of Egypt and Qatar countries.
USDCHF is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
USDCHF rebounds as the US Dollar strengthens amid heightened Middle East tensions, reaching around 0.8740 in the Asian market on Friday. Israeli airstrikes targeted Rafah, but the US cautioned against a military offensive without proper planning, emphasizing the potential for a disaster.
The USD Index hovers around 104.20, supported by hawkish remarks from Federal Reserve officials. Richmond Fed President Thomas Barkin stressed patience in rate adjustments, while Fed Chair Jerome Powell ruled out a March rate cut. Swiss Unemployment Rate rose to 2.5% (YoY), and the upcoming Swiss CPI data is eagerly awaited for further economic insights.
USDJPY – BoJ’s Ueda: High Likelihood of Maintaining Accommodative Conditions
The Bank of Japan Governor Ueda said on Friday, that even if negative rates are removed, we will maintain the health of our balance sheet in the monetary policy. If in near-term stimulus drawing from the economy, we maintain an accommodative stance on policy settings.
USDJPY is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
BoJ Governor Kazuo Ueda: Likelihood of Continued Accommodative Conditions High Even Without Negative Rates
– Will monitor BOJ balance sheet health during potential exit from stimulus policy.
– No comment on government jurisdiction over forex reserves special account management.
USDINDEX – USD Surges on Robust Labor Data, Supporting Case for Delaying Cuts
FED Powell said rate cuts in March are more doubtful, we have to see the evidence of slower inflation and sustained job growth in the US Economy. Initial jobless claims for last week came at 218K versus 220k expected, a reduction from 227K.
USD index is moving in an Ascending channel and the market has reached the higher high area of the channel
However, bullish momentum appears to be fading without new catalysts, as Federal Reserve speakers withhold additional guidance on the bank’s future actions.
Fed Chair Jerome Powell stated that a rate cut in March is “unlikely,” emphasizing the need for more evidence of declining inflation to build confidence in rate cuts. Despite several officials speaking this week, no new guidance was provided, reaffirming the Fed’s stance of awaiting more data and dismissing the possibility of cuts in March.
Market Digest: USD Gains on Positive Jobless Claims
– Initial Jobless Claims for the week ending February 3 come in at 218K, slightly below the consensus of 220K and a decrease from the previous week’s 227K.
– CME FedWatch Tool indicates a reduced likelihood of rate cuts in March, dropping to 20%, while the probability for the May meeting increases to 50%.
– The US Dollar receives support from rising US Treasury bond yields: 2-year at 4.45%, 5-year at 4.11%, and 10-year at 4.16%.
USDCAD – CAD Maintains Positive Stance Against USD
Canadian Dollar is now waiting for Labor and wage growth data scheduled today, the unemployment rate is forecasted to be higher, and employment change is also expected higher in today’s data.
USDCAD is moving in the Box pattern and the market has fallen from the resistance area of the pattern
The Canadian Dollar strengthens broadly against major currencies on Thursday, facing resistance from a recovering US Dollar as both emerge as top performers for the day. Lower-than-expected US Initial Jobless Claims draw investors back to the Greenback, reflecting the outperformance of the US economy.
Canada anticipates key economic data on Thursday, with attention turning to Friday’s labor and wage figures. Projections indicate a slight increase in the Canadian January Unemployment Rate, coupled with a smaller-than-usual positive Net Change in Employment for January.
Market Digest: CAD Rises on Oil Gains, Stable USD
– US Initial Jobless Claims surpass expectations at 218K for the week ending February 2, against the forecasted 220K.
– Previous week’s claims revised upward from 224K to 227K.
– 4-week average increases to 212.25K from the revised 208.5K.
– Fed Bank of Richmond President Thomas Barkin emphasizes Fed Chairman Jerome Powell speaks for the FOMC, deferring to Powell on March meeting outcomes.
– Barkin notes the Fed’s focus on inflation and unemployment, expressing caution on the accuracy of economic data.
– Neutral rate may have risen, and Barkin emphasizes the need for sustained and broadening inflation numbers.
– Canadian Unemployment Rate for January expected to rise to 5.9% from December’s 5.8%.
– Net Change in Employment projected to add 15K net job gains in January.
– Canadian annualized Average Hourly Wages for January to be released, with the last figure showing YoY hourly wage gains of 5.7%.
EURUSD – Below 1.0800 Before German CPI Data
ECB Chief Economist Philip Lane said inflation is slowing down in the Eurozone, but it will be sustained at the 2% target required. ECB Governing Council member Pierre Wunsch said wage growth is not marked in the Eurozone, rate cuts are possible only when the Wage growth has to increase with inflation lower.
EURUSD is moving in the Descending channel and the market has rebounded from the lower low area of the channel
– Two Fed officials signal commitment to tackling inflation, tempering expectations of early rate cuts.
– Markets scale back March rate cut bets, with over 65% likelihood priced for rate decrease by May, per CME FedWatch Tool.
– ECB Chief Economist Philip Lane notes faster-than-expected near-term disinflation, stresses further progress needed for 2% goal.
– ECB Governing Council member Pierre Wunsch sees hopeful signs on wages but favors waiting for more data before considering rate cuts.
– ECB’s March 7 meeting anticipated for hints on rate cut timeline; dovish remarks may weigh on the Euro and hinder EUR/USD pair.
– Focus on German CPI for January and speech by German Buba President Nagel for potential trading opportunities around EUR/USD.
AUDUSD – RBA’s Bullock: Encouraging Inflation, Target Yet to Be Met
RBA Governor Michelle Bullock said in Parliament on Thursday that inflation will be slowed down, and our policy settings are set for bringing inflation down in the economy. Household spending is higher, hence we fought for inflation to control without hurting public spending. We did not rule out rate hikes, we did when needed.
AUDUSD is moving in the Descending channel and the market has reached the lower low area of the channel
RBA Governor Michele Bullock’s Key Points:
– RBA Board is dedicated to reducing inflation.
– Recognizes the faster rise in the cost of living in recent decades.
– Finds recent inflation developments encouraging but acknowledges a distance to reach the target.
– Despite the central economic path, inflation has been outside the target range for four years.
– Australia’s inflation challenge persists despite some positive signs.
– High inflation duration raises the risk of adjusting inflation expectations.
– Board hasn’t ruled out or ruled in a further interest rate increase.
– Acknowledges the substantial costs of prolonged high inflation and commits to bringing it back to target.
– Balancing the goal of returning inflation to target without excessive economic slowdown.
– States that inflation doesn’t need to be in the 2-3% band for considering rate cuts.
– If consumption slows faster than expected, there is an opportunity to cut rates.
– A range of policy scenarios was considered at the February meeting.
NZDUSD – Surges to Around 0.6120 on ANZ’s Forecast of RBNZ Rate Hike in February
ANZ Bank predicted RBNZ will do rate hikes in February and April month for 25 basis points. These predictions come from the unemployment rate, robust job growth and retail sales in higher readings in the NZ economy.
NZDUSD is moving in the Descending channel and the market has reached the lower high area of the channel
– NZD strengthens as ANZ predicts RBNZ to raise cash rate in February and April, contrary to market consensus.
– RBNZ’s caution on inflationary pressures and strong labor market data contribute to ANZ’s rate hike forecast.
– Chinese markets closed for Lunar New Year; PBOC’s MLF rate-setting on February 18 expected to remain unchanged, according to Reuters poll.
– US Dollar Index shows resilience and strengthens for the second day, supported by hawkish Fed comments and positive job market data, despite a decline in US bond yields.
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