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MTrading Team • 2023-12-06

GBPUSD stays dicey after a two-day fall, US data eyed

GBPUSD stays dicey after a two-day fall, US data eyed

Traders consolidate the previous moves while bracing for the US employment data, as well as the second-tier data/events from the UK and Europe. The cautious optimism also takes clues from China stimulus news and the mixed US data, as well as an absence of major negatives from the geopolitical side.

With this, the US Dollar struggles to extend the two-day run-up at the highest level in a fortnight while the Gold price recovers from the previous support surrounding $2,015. Further, Crude Oil recovers from a three-week low while the Asia-Pacific shares edge higher.

It’s worth noting that the AUDUSD ignores softer Q3 GDP while the NZDUSD leads the G10 gainers versus the Greenback. Additionally, USDJPY traces the downbeat yields but EURUSD stays pressured amid a lack of hawkish bias about the European Central Bank (ECB) and also due to the bloc’s economic woes.

On a different page, BTCUSD and ETHUSD retreat from yearly highs while snapping a five-day winning streak as bulls seek more clues to defend the stellar run-up.

Following are the latest moves of the key assets:

  • Brent oil recovers from a three-week low, mildly bid near $77.60 by the press time.
  • Gold price picks up bids to $2,035, printing the first positive day in three at the latest.
  • USD Index lacks upside momentum at a two-week high around 104.00 as we write.
  • Wall Street closed mixed while Asia-Pacific stocks edged higher. Further, equities in Europe and the UK begin the day on a positive side.
  • BTCUSD and ETHUSD retreat from multi-month highs to around $43,700 and $2,270 by the press time.
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US Dollar recovery stalls ahead of data…

Although the US Dollar strengthened on Tuesday, despite lower US Treasury yields and mixed US data, the market’s consolidation ahead of this week’s US jobs report and next week's Fed announcements allow the Greenback sellers to return to their desks.

It’s worth noting that softer US job signals failed to drown the USD on Tuesday after US Treasury Secretary Janet Yellen mentioned that she is not seeing the usual signs of a weakening labor market that would bring fears of recession. That said, US JOLTS Job Openings dropped more than expected in October, to 8.733M from 9.35M prior and 9.30M market forecast. Also helping the Greenback to remain firmer was the ISM Services PMI for November which rose past market forecasts of 52.0 and the previous readings of 51.8 to 52.7.

Apart from that, the slightly positive mood also takes clues from the news that S&P and Fitch both kept China’s credit rating outlook unchanged even after Moody’s downgrade to the nation’s economic outlook the previous day. On the same line were updates from China's finance ministry that issued draft rules suggesting social security funds will make direct and private equity investments.

Alternatively, Hamas Official crossed wires on Tuesday while saying that there will be no negotiations or exchange of detainees until aggression against Gaza stops. The same joins Israel’s pledge to move out Hamas and related organizations to escalate geopolitical fears and challenge the US Dollar bears.

Despite the US Dollar’s dicey moves and upward revision to the Eurozone PMI data for November, the Euro isn’t recovering much as European Central Bank (ECB) officials sound dovish. That said, ECB Governing Council member Boris Vujcic said that his baseline is for no more rate hikes and data-dependent decisions. It should be observed that ECB Executive Board Member Isabel Schnabel said late Monday that further rate hikes are ‘rather unlikely’ after the latest inflation data. On the same line, the ECB’s monthly Consumer Expectation Survey for October showed that the consumers see inflation steady for the next 12 months at 4.0% but the economic growth expectations were seen at -1.3% compared to 1.2% expected previously.

Elsewhere, the latest Reuters Tankan Survey for Japan’s big manufacturers improved for a second straight month, 12 in December versus 6 reported the previous month. Further, Bank of Japan (BOJ) Deputy Governor Ryozo Himino defends the easy-money policy while turning down the chatters about having a preset schedule in mind on exit from the easy policy. While the Yen fails to cheer US Dollar strength, AUDUSD fails to justify negatives as Australia’s Q3 GDP marked the slowest growth in two years, +0.2% QoQ versus 0.4% expected.

Russian Deputy Prime Minister Alexander Novak said the nation intends to fully fulfill its obligations to voluntarily reduce oil and fuel supplies as early as January, which in turn should have favored the energy prices amid mixed concerns.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

GBPUSD ignores FSR, EURUSD bears the burden of downbeat German data

Recently, the UK’s Financial Stability Report (FSR) failed to impress the GBPUSD buyers even if the pair prods the two-day losing streak. Further, a slump in the German Factory Orders and cautious mood ahead of the Eurozone Retail Sales, as well as the US ADP Employment Change, exert downside pressure on the EURUSD.

Looking ahead, the EU and the US economics are likely to keep the market players busy even if the US Dollar appears dicey.

May the trading luck be with you!