GBP/USD Pair Rose Sharply Above $1.22, EUR/USD Pair Also Rose
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The dollar fell on Tuesday in anticipation of the eagerly awaited inflation report. Markets are looking at US consumer inflation data for further clues to the Federal Reserve's policy outlook. Investors expect the headline annual CPI to fall to 6.2% from 6.5% in December and the core CPI, which excludes volatile food and energy prices, to fall to 5.5% from 5.7%.
USD/JPY
The Yen pair initially cheered the pullback in the Treasury bond yields before the Japanese government’s announcements of Bank of Japan (BoJ) officials triggered hawkish concerns and weighed on the prices. Also favoring the USD/JPY bears is the broad US Dollar pullback as traders brace for a positive surprise from the US Consumer Price Index (CPI) for January.
Japan’s preliminary readings of the fourth quarter (Q4) Gross Domestic Product (GDP) data printed mixed readings. Following that, the official nomination of Kazuo Ueda as the BoJ leader weighed on the USD/JPY prices.
Fresh fears of the US-China tension over the balloon shooting also challenge the sentiment and put a floor under the USD/JPY price.
The USD/JPY pair started trading above 132.30 today, but then fell towards 131.90. The yen pair managed to bounce back and traded close to 132.30 again. USD/JPY is currently trading above 132.20.
EUR/USD
The European Commission's winter economic forecast published yesterday says that the EU economy is geared to avoid recession.
The EUR/USD pair held a narrow range of 1.0730-1.0745 in morning trading, but surged up in the European session.
The euro maintained its earlier gains against the slightly weaker US dollar, with EUR/USD changing hands around 1.0760. The latest US inflation report due to be released will be another driver of action.
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GBP/USD
The UK unemployment rate remained unchanged for the 3 months to December 2022, as expected. The number of people out of work for up to 6 months has increased, mainly among people aged 16 to 24. The number of people working in the UK increased by 74,000. in the three months to December, well above market forecasts for an increase of 40,000. and after an increase of 27,000 in last month. Meanwhile, from November 2022 to January 2023, the number of vacancies fell by 76,000. up to 1,134,000
UK wages rose 5.9% in December 2022 compared to the same month last year, beating estimates and down 6.4% from the previous print. What will be of concern, however, is the increase in average earnings without bonuses, which rose to 6.7%, beating the 6.5% forecast. The data compares with market forecasts of growth of 6.2% and 6.5%, respectively. In real terms, adjusted for inflation, the increase in total and regular wages fell by 3.1% in the year from October to December 2022 for total wages and by 2.5% for regular salaries.
GBP/USD has gathered bullish momentum and climbed toward 1.2200 in the European trading hours.
AUD/USD
The Australian and New Zealand dollars tried to hold their gains on Tuesday after a rebound on Wall Street boosted global risk sentiment and Australian data underlined the case for further domestic interest rate hikes.
Currently, the price of the Australian pair is around 0.6970.
Source: investing.com, finance.yahoo.com
