The EUR/USD Pair Is Trading Above 1.06 Again, The USD/JPY Pair Is Close To Level Of 131
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The dollar fell on Wednesday, losing against currencies such as the Australian dollar and against the euro, which gained ground on the data series. The dollar was already under pressure from investors becoming more optimistic about the prospect that China's easing of strict COVID restrictions would breathe life into the world's second-largest economy.
Wednesday's data showed that consumer price pressure in France fell much more than expected in December, while the previous day's data from Germany also showed that inflation fell much more than expected. Last week's Spanish inflation data painted a similar picture.
The Fed meeting minutes from the last Federal Open Market Committee (FOMC) meeting are due to be released later and may shed more light on the board's outlook for the monetary policy tightening cycle.
Perhaps more importantly, the market will also be watching employment and inflation figures ahead of the next FOMC meeting in early February.
EUR/USD
The euro saw its biggest one-day fall against the dollar on Tuesday. Today, the EUR/USD pair is trading above 1.06 again. The breakout took place during the European session, in the asia session the pair stayed below 1.06
The Eurozone showed resilience in late 2022 with plenty of positive data, which so far looks set to continue into 2023. Yesterday brought more positive data as German inflation figures came in at -0.8% vs. forecast - 0.3% with unemployment rate beating estimates. French flash inflation figures were released earlier today, further strengthening the narrative.
The S&P Global Eurozone PMI Composite Output Index remains below 50 and is down for the sixth consecutive month at 49.3, up from 47.8 in November. The data signaled the slowest decline since July last year, when activity levels began to decline. This decline has moderated in each of the last two periods of the study. Eurozone Services PMI business activity index rose to 49.8 in December from 48.5 in November.
Source: investing.com
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USD/JPY
The yen pair in the European session is heading towards 131.
Japan's manufacturing PMI declined slightly in December.
AUD/USD
The Australian dollar surged towards 0.68 on Wednesday. Moreover, some experts believe that AUD/USD is moving towards 0.69. The current level of the pair shows that it is further than close to this level.
The Australian was driven by optimism that . China considers partial lifting of Australia's coal mining ban
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GBP/USD
Sterling rose against the weakening dollar and was slightly higher against the euro as the easing of COVID rules in China prompted investors to bid on risky currencies.
The cable market in the morning session stayed below 1.20, in the European session there was a breakout and the pair returned to htrading around 1.2050.
ING analysts warned of a potential bearish sentiment in the pound against the US dollar.
ING analysts believe that sterling's performance against the euro this year will likely depend on how quickly the Bank of England (BoE) can stop tightening monetary policy.
Investors see potential bullish signals for the single currency against the pound if the ECB continues to raise interest rates while the BoE sends mixed messages.
Source: investing.com, dailyfx.com, finance.yahoo.com
