Posted at 22 January 2025 / Categories Market Roundups
Market Roundup
•UK Public Sector Net Borrowing (Dec) 17.81B ,14.20B forecast, 11.80B previous
•UK Public Sector Net Cash Requirement (Dec) 19.876B, - 13.128B previous
Looking Ahead Economic Data (GMT)
•13:30 Canada IPPI (YoY) (Dec) - 2.2% previous
•13:30 Canada IPPI (MoM) (Dec) 0.5% forecast, 0.6% previous
•13:30 Canada RMPI (YoY) (Dec) - 2.0% previous
•13:30 Canada RMPI (MoM) (Dec) 0.4% forecast -0.5% previous
•13:45 US Redbook (YoY) - 4.0% previous
•15:00 US Leading Index (MoM) (Dec) -0.1% forecast ,0.3% previous
Looking Ahead Events And other Releases (GMT)
•15:15 ECB President Lagarde Speaks
Currency Forecast
EUR/USD: The euro strengthened against the dollar on Wednesday as markets remain calm in response to Trump's tariff threats. Markets seemed unfazed by Trump's promise to impose new levies on the EU and a 10% tariff on Chinese goods starting Feb. 1. Europe faces possible tariff threats, particularly on natural gas imports from the U.S., though details remain unclear. Meanwhile, European Central Bank policymakers backed further interest rate cuts, signaling that next week's reduction is nearly certain, with more cuts likely to follow. Investors will focus on Friday Purchasing Managers’ Index data for January on Friday and the GfK consumer confidence indicators. Immediate resistance can be seen at 1.0440(50%fib), an upside break can trigger rise towards 1.0500(Psychological level).On the downside, immediate support is seen at 1.0374(38.2%fib), a break below could take the pair towards 1.0307(23.6%fib).
GBP/USD: The pound rose for a third consecutive day on Wednesday, reaching a two-week high against the dollar, as uncertainty over U.S. President Donald Trump's tariff plans kept the greenback under pressure. Although the pound initially dropped more than 0.3% in early trading due to higher-than-expected UK borrowing in December, the lack of clarity on Trump's tariff policies continued to weigh on the dollar. Since Monday, the U.S. currency has been broadly weaker. While Trump did not impose new tariffs on his first day back in office, he has indicated he may impose around 25% tariffs on Canada and Mexico, and 10% on China, starting February 1. Immediate resistance can be seen at 1.2357(Jan 21st high), an upside break can trigger rise towards 1.2437(50%fib).On the downside, immediate support is seen at 1.2310(38.2%fib), a break below could take the pair towards 1.2163(23.6%fib)
AUD/USD: The Australian dollar recovered from early lows on Wednesday as uncertainty over President Donald Trump's tariff plans kept markets guessing. Trump announced late Tuesday that his administration was considering a 10% tariff on Chinese imports starting Feb. 1, the same day he previously mentioned possible 25% levies on Mexico and Canada. He also vowed tariffs on European imports, but provided no further details. Despite these threats, the lack of concrete plans from Trump's first day in office led to a 1.2% drop in the dollar against a basket of major currencies to start the week. At GMT 13:08, The Australian dollar was last trading down 0.24% to $0.6287 . Immediate resistance can be seen at 0.6288(50%fib), an upside break can trigger rise towards 0.6297 (Higher BB).On the downside, immediate support is seen at 0.6223(23.6%fib), a break below could take the pair towards 0.6171 (Jan 16th low).
USD/JPY: The U.S. dollar struggled for direction against yen on Wednesday as investors awaited this week’s upcoming the Bank of Japan’s (BOJ) rate decision. The BOJ is expected to raise interest rates on Friday, barring any market disruptions from U.S. President-elect Donald Trump's inauguration. This rate hike would raise short-term borrowing costs to levels not seen since the 2008 global financial crisis. At the two-day meeting ending Friday, the BOJ is likely to increase its short-term policy rate to 0.5%. The bank is also expected to revise its price forecasts upward, with growing expectations that rising wages will help Japan meet its 2% inflation target sustainably. Immediate resistance can be seen at 156.25 (38.2%fib) an upside break can trigger rise towards 157.00(Psychological level). On the downside, immediate support is seen at 154.92(50%fib) a break below could take the pair towards 154.75 (Lower BB).
Equities Recap
European stocks surged to a record high on Wednesday, driven by strong performances in technology and healthcare sectors, as markets seemed to overlook tariff concerns sparked by new threats from U.S. President Donald Trump.
At (GMT 13:13 ),UK's benchmark FTSE 100 was last trading up at 0.16 percent, Germany's Dax was up by 1.33 percent, France’s CAC finished was up by 1.10 percent.
Commodities Recap
Gold prices surged to a near three-month high on Wednesday, driven by uncertainty over U.S. President Trump's policies and a weaker dollar.
Spot gold added 0.4% to $2,755.19 per ounce as of 1200 GMT. The price hit its highest level in 12 weeks earlier in the session and is close to its record peak of $2,790.15 reached in October.U.S. gold futures gained 0.3% to $2,766.80.
Oil prices remained steady on Wednesday as traders kept a close eye on President Donald Trump's proposed tariffs and the potential effects of the national energy emergency he declared on his first day in office.
Brent crude futures inched 4 cents higher, or 0.05%, to $79.33 per barrel at 1246 GMT. U.S. West Texas Intermediate crude futures edged 2 cents lower, or 0.03%, to $75.81.