Market Update - 16 February  2023

EUR/USD resumes the upside and retakes 1.0700 and above. ECB speakers will take centre stage later in the session. Producer Prices and the Philly Fed index take centre stage in the US docket. The single currency manages to shrug off part of Wednesday’s pullback and encourages EUR/USD to reclaim the area above the 1.0700 barrier on Thursday. (FXStreet)

USD/JPY edges lower on Thursday and snaps a three-day winning streak to a multi-week high. Retreating US bond yields undermines the Greenback and exerts some pressure on the major. Hawkish Fed expectations should limit the USD decline and lend support ahead of the US data. (FXStreet)

GBP/USD suffered heavy losses following the soft UK inflation data on Wednesday but managed to hold above the key 1.2000 level. The pair consolidates its losses slightly below 1.2050 in the European morning. (FXStreet)

NZD/USD stages an intraday recovery from mid-0.6200s amid a modest USD downtick. A positive risk tone undermines the safe-haven buck and benefits the risk-sensitive Kiwi. Hawkish Fed expectations should limit the USD losses and cap the upside for the major. (FXStreet)

USD/CAD meets with some supply and extends the overnight pullback from the weekly high. An uptick in oil prices underpins the Loonie and exerts pressure amid modest USD weakness. Hawkish Fed expectations should help limit deeper USD losses and lend support to the major. (FXStreet)

AUD/USD, down nearly 4% since the start of this month, has been guided by the relative underperformance of the Australian economy, as reflected in the Economic Surprise Indices (ESI). The Australian ESI is languishing around the 2020 lows, while its US counterpart is at the highest level in 10 months. The better-than-expected US data recently have translated into a marginal upgrade in consensus US economic growth expectations for 2023. In contrast, Australia's economic growth outlook for the current year is yet to see any upgrades. (DailyFX)

USD/CHF clings to mild losses while snapping two-day winning streak. Retreat in US Treasury bond yields, DXY joins failure to cross six-week-old resistance to trigger pullback moves. China, US debt-ceiling talks seem underpinning cautious optimism but hawkish Fed bets keep buyers hopeful. (FXStreet)

GBP/JPY edges lower for the second straight day, though lacks follow-through selling. Recession fears, expectations for a hawkish BoJ shift underpin the JPY and caps gains. Bets that the BoE’s current rate-hiking cycle is nearing the end favour bearish traders. (FXStreet)

USD/INR extends pullback from four-month-old resistance line amid sluggish markets. US Dollar pares gains around six-week high as Treasury bond yields retreat. China-linked headlines also weigh on prices amid cautious optimism in Asia. (FXStreet)

Gold price edges higher on Thursday and draws support from a modest US Dollar weakness. Recession fears lend additional support to the XAU/USD, though the upside seems limited. Expectations for more rate hikes by Federal Reserve should act as a headwind for Gold price. (FXStreet)

WTI picks up bids to rebound from weekly low, snaps three-day downtrend. US Dollar pullback, hopes of more demand from China supersede bearish EIA Oil inventories. Fears of more Fed rate hikes, US SPR releases challenge energy bulls. (FXStreet)

Silver price bounces off 10-week low to snap three-day downtrend. Cautious optimism, pullback in yields underpin US Dollar’s retreat from multi-day high and favor XAG/USD buyers. China, second-tier US data may entertain Silver traders ahead of next week’s FOMC Minutes. (FXStreet)

Natural Gas remains side-lined around $2.50. Wednesday’s downtick in prices of the natural gas was amidst rinsing open interest, which supports the view that extra losses remain on the cards for the time being. So far, the commodity is expected to maintain the current range bound theme around the $2.50 region per MMBtu. (FXStreet)

Housing Development Finance Corp. priced its biggest ever rupee bond issuance ahead of a merger with its banking unit, which will create an Indian financial services behemoth valued at more than $200 billion. India’s largest mortgage lender will raise 250 billion rupees ($3 billion) selling notes due in a decade at a coupon of 7.97% on Friday, according to people familiar with the matter. The proceeds will be used to support its housing finance business, said the people, who asked not to be identified discussing confidential information. (Bloomberg)

Bitcoin surged higher and gained nearly 10% on Wednesday, touching its highest level since August near $25,000. Although BTC/USD retreated modestly early Thursday, it clings to modest daily gains at around $24,500. Similarly, Ethereum rose 8% on Wednesday before stabilizing near $1,700 on Thursday. (FXStreet)

Source: FXStreet, DailyFX, Bloomberg

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