Gold buyers keep the reins even as Fed policymakers signal higher rates

After a turnaround Thursday in the market, Friday fevers probed the optimists as central bankers defend hawkish bias. The risk appetite also struggled amid multi-year high Japanese inflation and fresh tension surrounding Taiwan. However, softer US data and PBOC inaction put a floor under the prices and keep the bulls hopeful. 

That said, the US Dollar bears retreat amid Fed speakers’ last attempt to convince markets of their ability to propel rates despite recently softer US data. The same joins downbeat UK Retail Sales to weigh on the GBPUSD. However, prices of Gold remain mildly bid as stock futures firmer and the yields fade the previous day’s rebound from multi-month bottom.

JPY drops the most against the greenback while AUDUSD occupied the other end. Further, Brent oil remains firmer amid hopes of more China demand.

On a different page, Genesis’ filing of bankruptcy probes crypto buyers after an upbeat week.

Following are the latest moves of the key assets:

• Brent oil keeps the previous day’s recovery to aim for a fresh six-week high near $87.00.
• Gold refreshes nine-month high even as buyers struggle around $1,930.
• USD Index stays depressed near 102.00 while bracing for the weekly loss.
• Wall Street closed in the red but stocks in the Asia-Pacific region, as well as equities in Europe and the UK, trade mixed at the latest.
• BTCUSD and ETHUSD print mild losses around the multi-day high, close to $21,000 and $1,550 as we write.

Lackluster markets prevail

Traders struggle to find clear directions on Friday as the US Dollar bears take a breather but the recovery moves fade amid inactive bond markets. Also restricting the market moves could be the mixed play between the central bankers’ readiness for further rate hikes and the looming recession in the US. It should be noted that the Chinese central bank’s defense of the easy money policy contrasts with Taiwan’s alarm over Beijing’s air presence, which in turn probes the risk-on mood. However, a lack of major data/events keeps the traders guessing ahead of next week’s bumper data calendar amid a silence period for the Fed members.

Talking about the data, UK Retail Sales flashed another red signal for the British economy that’s already struggling from workers’ strikes and slowing inflation, which in turn probed the GBPUSD bulls.

On the other hand, Gold buyers occupy the driver’s seat despite the latest pullback in prices amid hopes of more easing in the US Dollar and improvement in the market sentiment. The same joins the upbeat performance of Oil and optimism surrounding China to help the Antipodeans like AUD, NZD and CAD.

BTCUSD and ETHUSD seesaw near multi-day highs as the sluggish US dollar and hopes of the end to FTX-inflicted pain jostle with price-negative news from the key industry player Genesis.

• Strong buy: GBPUSD
• Strong sell: ETHUSD, USDJPY
• Buy: USD Index, USDCAD, Nasdaq, EURUSD
• Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

Central bankers are the key

Given the lack of major data/events on the calendar, other than Canadian Retail Sales, traders will rely on the multiple central bankers’ appearances at the World Economic Forum in Davos for clear directions. In doing so, they will seek hints on higher rates to pare the weekly moves that favored riskier assets but equities are likely to remain sluggish for the week amid recession fears.

May the trading luck be with you!