The EUR/USD Pair Ended The Week Trading At 1.0648, The Cable Market (GBP/USD) Managed To End The Week Above 1.20
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The dollar offset earlier gains after US employment data showed employers created 223,000 jobs in December, more than economists had forecast, while wage growth slowed this month.
Fed futures traders have raised bets that the Fed will raise interest rates by 25 basis points at the end of its two-day meeting on February 1 after Friday's data. An increase of 25 basis points is now seen as a 67% probability, up from 54% before, and an increase of 50 basis points is now seen as a 33% probability.
USD/JPY
USD/JPY started the week at 130.92, ended the week much higher at 132.0540. The week's high was even higher than the last reading and the pair crossed 134 at that point. The low was shockingly low compared to the high as it was below 130, 129.53 to be exact.
EUR/USD
The EUR/USD pair started the week and the new year at a high level of 1.07. It ended the week trading at 1.0648. It was a tumultuous week for the pair as they had to struggle many times to keep their trade above 1.06 and thus their low was read below that level. The lowest level was even below 1.05 at 1.0491, the highest later was at the level from the beginning of the trading week, i.e. at 1.0709.
Unsurprisingly, drastically lower energy prices in the Eurozone helped to soften the headline measure of inflation, where it improved year-on-year and month-on-month - highlighting the trend of lower prices for EU consumers. EU headline inflation drops from 10.1% to 9.2% YoY. Core inflation rises from 5% to 5.2% YoY.
According to estimates, energy price growth, although still the largest contributor to the overall index, fell from 41.5% in October to 25.7% in December. By contrast, price pressures on non-energy or food items are higher, suggesting that high inflation remains quite common.
GBP/USD
Similarly for the euro, the cable pair also had a difficult week. The pound was exceptionally weak and fell below 1.20. They will start the week at 1.2111 and thus it is the highest reading in this trading week, and the end of the week was at 1.2093. The lowest level of the GBP/USD pair was below 1.1850 (1.1848).
AUD/USD
The Aussie pair was the best among the major pairs of valises. Throughout the week, AUD/USD traded in a tight range compared to other pairs. The pair's weekly range was 0.6700-0.6875. The pair started the year trading at 0.6821 and finished at 0.6879. The end of the week was close to the week's high at 0.6888. The pair dropped the lowest in the week at 0.6690.
The factors contributing to the pair's volatility appear to have been largely external, with Chinese politics, Federal Reserve meeting minutes and US employment figures playing a role.
China's efforts to break out of its economically stifling zero-case Covid-19 policy appear to come with several challenges. While official figures show a situation that is under control, anecdotal evidence from hospitals and morgues suggests a more problematic transition.
At the moment, Australia's trade surplus remains at record highs and the November figure will be known this Thursday.
Source: finance.yahoo.com, investing.com
