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  • Writer's pictureMike Paterson

Greenback demand running out of steam a little

Tuesday 7 February 2023

Some general USD demand has been prevailing still in the past 24 hours but with some key levels holding we're seeing consolidation/a little reversal this morning.

The RBA has hiked interest rates by 0.25% but with hawkish tones saying there was more to come. They also said that medium term inflation remains anchored and noted that CPI inflation is forecast to decline to 4¾ this year and to around 3% by mid-2025. Cue some general AUD demand with AUDUSD having previously held 0.6850-80 and now rising to look at 0.6950. JPY also found a few buyers after Japan's FM Suzuki said that the MOF hasn’t approached Amamiya about becoming the next BOJ Governor.

Equities are off their lows and looking a little perky again as I type while WTI has found a cap at $76.00 this time after a good rally from the $74.50-60 hold. Gold has held that decent line at $1860 but $1880 capping the rally so far. Ukraine/Russia war continues to be the elephant in the room amid other geo-political risk.

GBPUSD: Holding ahead of the large bids/support at 1.2000 with strong 76.4% Fib support behind at 1.1985 but capping at 1.2050-60 since and some re-sells duly placed. I remain a rally seller. EURGBP: Holding 0.8900 area in the latest retreat bu equally failing around 0.8930 now as core pairs decide what's next. Exoect some more two-way trading. GBPJPY: Capping at 159.50-60 again bu holding 158.40 so far as core pairs cconsolidate. Sellers poised still but caution required atm.

EURUSD: Looking a little soggy still overall but holding around 1.0700 and now capping at 1.0730-50. I remain a rally seller. USDJPY: Capping into 132.80 and now looking at 131.70 helped by some USD supply but also the Amamiya news. Feeling more comfortable about selling rallies again and some shorts duly placed.

Plenty more to read in my full report and more detailed update for traders. Mail for details.

Interbank rates: 08.45 GMT

GBPUSD 1.2028

EURUSD 1.0720

EURGBP 0.8912

GBPEUR 1.1220

GBPCAD 1.6092

GBPCHF 1.1114

GBPZAR 21.2400

USDJPY 131.83

EURJPY 141.30

GBPJPY 158.55

GBPHKD 9.3720

EURCHF 0.9927

EURHKD 8.3523

AUDUSD 0.6927

NZDUSD 0.6329

USDCAD 1.3415

USDCHF 0.9260

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