Hawkish FOMC tones help underpin the Greenback
Thursday 23 February 2023
Last night the US Fed FOMC Minutes from the latest meeting were toward the hawkish side and we saw some USD demand again although some of that has dried up in recent hours but the Greenback remains underpinned overall.
Equities are rallying off their post-Minutes lows but WTI is struggling to make much of a bounce after falling further to test $73.75-80 yesterday and now capping into $74.50 as I type. Gold capping into $1835 after its $1823 lows amid the uncertainty. Ukraine/Russia war continues to be the elephant in the room.
Data today brings final EU CPI prints at 10.00 GMT and then US PCE and the weekly jobless release at 13.30 GMT BOE MPC members Cunliffe (10.45 GMT) and hawkish Mann (11.30 GMT) both speaking this morning while Fed's Bostic (15.50 (GMT) and Daly (19.00 GMT) talk across the pond later. BOJ Gov nominee Ueda makes his claim for the top spot tonight as I warned earlier in the week.
Remember, focus on the price action and let the algos do the heavy lifting/dropping. The important thing is to identify your preferred risk/reward entry/exit levels prior and be poised to execute.
GBPUSD: A decent hold of 1.2030 but capping at 1.2080 amid the general USD demand second-guessing. Option interest at 1.2000. EURGBP: Tightly bound after holding 0.8785 with sellers poised into 0.8825 now. Expect some more two-way trading as core pairs fluctuate. GBPJPY: A support line now forming at 162.25 but capping at 162.50 as the JPY jury remain out and GBPUSD stays capped at 1.2080-00.
EURUSD: Holding 1.0600 in the extended retreat post-FOMC Minutes but capping at 1.0630 amid the general USD demand and some pips banked in the retreat. USDJPY: Capping around 135.00 again with some JPY demand returning but equally holding 134.50-70 as markets wait on Ueda.
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Interbank rates: 08.07 GMT