Market Update - 12 January 2024

EUR/USD continues to gain ground for the third successive day, trading higher around 1.0980 during the Asian session on Friday. The EUR/USD pair receives upward support due to the subdued US Dollar (USD), a trend attributed to the market's expectations of five rate cuts by the Federal Reserve by the end of 2024, beginning with anticipated cuts in March and May. (FXStreet)

The GBP/USD pair gains ground to nearly the weekly high during the early Asian trading hours on Friday. The November UK Gross Domestic Product (GDP) is estimated to grow by 0.2% MoM from the 0.3% contraction in the previous reading. GBP/USD currently trades near 1.2780, gaining 0.16% on the day. (FXStreet)

The USD/CHF pair remains confined within a multi-week trading range of 0.8400-0.8575 during the early European trading hours on Friday. The firmer US Dollar (USD) following the upbeat US inflation data might lend some support to the pair. However, the upside of USD/CHF might be limited due to the escalating tension in the Middle East. At press time, the pair is trading at 0.8520, losing 0.02% on the day. (FXStreet)

USD/CAD retraces its recent gains recorded on Thursday, trading lower near 1.3350 during the European session on Friday. The Canadian Dollar (CAD) is strengthening, influenced by the positive movement in Crude oil prices. This uptick in oil prices is attributed to escalating tensions in the Middle East following military attacks by the US and UK on Iran-backed Houthi locations in Yemen. (FXStreet)

The NZD/USD pair builds on the overnight bounce from the sub-0.6200 levels, or the weekly low, and gains positive traction for the second successive day on Friday. Spot prices stick to modest intraday gains through the first half of the European session and currently trade around the mid-0.6200s, closer to the top end of the weekly range. (FXStreet)

USD/MXN extends its losses for the second straight day, possibly due to the improved risk appetite as traders price in the possibility of resuming rate cuts in March and May. The USD/MXN pair trades lower near 16.87 during the European session on Friday. (FXStreet)

EUR/GBP continues to move on a downward trajectory for the second successive session, trading near 0.8590 during the early European session on Friday. The EUR/GBP pair loses ground on improved production data from the United States (US). (FXStreet)

Indian Rupee (INR) gathers strength despite the renewed US dollar (USD) demand on Friday. INR is expected to have a choppy session on Friday due to the upbeat US inflation data. Investors now see the Federal Reserve (Fed) potentially delaying its first interest rate cut in March meeting. (FXStreet)

The EUR/JPY cross trades on a softer note for the second consecutive day during the early European session on Friday. The risk-off mood due to a further escalation of geopolitical tensions in the Middle East boosts the safe-haven currency like the Japanese Yen (JPY) and acts as a headwind for the EUR/JPY cross. The cross currently trades near 159.30, down 0.15% for the day. (FXStreet)

The AUD/JPY cross attracts some dip-buying near the 100-hour Simple Moving Average (SMA), around the 97.00 mark, and climbs to a fresh daily peak following the release of Chinese inflation figures. Spot prices currently trade just below mid-97.00s, up nearly 0.20% for the day, reversing a part of the previous day's retracement slide from the highest level since December 4. (FXStreet)

The People’s Bank of China (PBoC) sets the USD/CNY central rate for the trading session ahead o Friday at 7.1050 as compared to the previous day's fix of 7.1087 and 7.1592 Reuters estimates. (FXStreet)

West Texas Intermediate (WTI) price rises on the second consecutive day, driven by heightened concerns over potential oil supply disruptions in the Red Sea. Air strikes carried out by the United States (US) and United Kingdom (UK) targeted Iran-backed Houthis in Yemen, raising fears that the situation could escalate the Israel-Gaza conflict into a regional conflict. The WTI price improves near $73.50 per barrel during the Asian session on Friday. (FXStreet)

Gold price (XAU/USD) gains positive traction for the second straight day on Friday and recovers further from a one-month low, around the $2,013 area, representing the 50-day Simple Moving Average (SMA) touched the precious day. The intraday ascent extends through the first half of the European session and is sponsored by an escalation of geopolitical tensions in the Middle East, which is seen benefitting the safe-haven precious metal. Adding to this, the US Dollar (USD) extends its range-bound price action amid the uncertainty over the Federal Reserve's (Fed) rate trajectory and turns out to be another factor underpinning the commodity. (FXStreet)

Silver price (XAG/USD) discovered a significant buying interest after printing a fresh seven-week low at $22.50. The white metal has recovered to near $23.00 as bets in favour of a rate-cut decision by the Federal Reserve (Fed) in March remains firmer despite stubbornly higher United States Consumer Price Index (CPI) report for December. (FXStreet)

Source: FXStreet

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