Market Update - 15 February  2023

NZD/USD remains under heavy selling pressure for the second successive day on Wednesday. Spot prices drop closer to the monthly low amid strong follow-through buying around the USD. Expectations for additional rate hikes by the Fed and the risk-off mood benefit the greenback. (FXStreet)

EUR/USD gives away part of the weekly advance on Wednesday. Chairwoman C.Lagarde is due to speak later in the session. Markets’ attention is expected to be on the US Retail Sales. Sellers seem to have regained the upper hand around the European currency and now put EUR/USD under some pressure near the 1.0700 neighbourhood on Wednesday. (FXStreet)

GBP/USD extends the previous day’s pullback from fortnight high to snap two-day uptrend. UK CPI slides to 10.1% YoY in January versus 10.3% expected and 10.5% prior. Upbeat Treasury bond yields, hawkish Fed speak underpin US Dollar rebound. Hopes of overcoming UK’s labor crisis, BoE’s cautious optimism probe Cable buyers. (FXStreet)

USD/JPY retreats from intraday high, indecisive after two-day winning streak. Sustained break of 50-DMA, upbeat oscillators favor bulls within bearish chart pattern. A clear downside break of 130.60 confirms rising wedge and can recall sellers. (FXStreet)

USD/CAD regains positive traction on Wednesday and is supported by a combination of factors. Sliding crude oil prices undermines the Loonie and acts as a tailwind amid sustained USD buying. The prospects for more rate hikes by the Fed and the risk-off mood benefit the safe-haven buck. (FXStreet)

AUD/USD meets with heavy supply on Wednesday and dives back closer to the weekly low. Rising bets for additional rate hikes by the Fed push the USD back closer to a multi-week top. The risk-off mood also benefits the safe-haven buck and weighs on the risk-sensitive Aussie. (FXStreet)

USD/CHF picks up bids to refresh intraday high, extend the previous day’s bounce off one-week low. Upbeat MACD signals, sustained trading beyond 200-HMA favor buyers inside bullish chart formation. Sellers need to conquer the golden Fibonacci ratio to retake control. (FXStreet)

EUR/GBP gains strong positive traction and snaps a seven-day losing streak to a two-week low. The softer UK CPI print weighs on the Sterling and prompts an aggressive short-covering move. Bets for additional jumbo interest rate hikes by the ECB underpin the Euro and remain supportive. (FXStreet)

GBP/JPY meets with a fresh supply on Wednesday and erodes a part of the overnight gains. The softer UK CPI print eases pressure on the BoE to tighten further and weighs on the GBP. The risk-off mood underpins the safe-haven JPY and also contributes to the intraday decline. (FXStreet)

Hong Kong’s intervention to support the local dollar has made just a minor dent in traders’ bearish bets, suggesting more liquidity will need to be drained from the system to defend the currency peg. The Hong Kong dollar has strengthened less than 0.1% from the weak end of its trading band with the greenback since the city’s de-facto central bank stepped in this week. Traders are looking through the intervention to the recent slump in the city’s interbank rates, which continue to offer hedge funds the biggest opportunity in history to borrow the currency cheaply and buy the higher-yielding US dollar in the so-called short HKD carry trade. (Bloomberg)

USD/INR seesaws around multi-day high as firmer US Dollar jostles with sluggish markets, downbeat Oil price. Fed Officials ignore sticky inflation to defend hawkish bias and propel US Treasury bond yields, USD. Upbeat WPI inflation favor RBI rate hike expectations and put a floor under Indian Rupee. US data, risk catalysts eyed for fresh impulse. (FXStreet)

Prices of the WTI prolonged the weekly leg lower on Tuesday. The daily decline was on the back of increasing open interest and volume and it is indicative that further losses lie ahead for the commodity. That said, the loss of the minor support at $76.58 (February 9) could pave the way for a drop to the 2023 low at $72.30 (February 6). (FXStreet)

Gold price extended its slide with the 10-year US T-bond yield holding comfortably above 3.7% during the Asian trading hours on Wednesday. XAU/USD was last seen trading at its lowest level since early January below $1,850. (FXStreet)

Bitcoin gained nearly 2% on Tuesday and seems to have gone into a consolidation phase slightly above $22,000 on Wednesday. Ethereum rose more than 3% on Tuesday and reclaimed $1,500 after having declined in the previous two days. Early Wednesday, ETH/USD is moving sideways in a narrow range at around $1,550. (FXStreet)

Source: FXStreet, Bloomberg​

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