Market Roundup
• GfK German Consumer Climate (Feb): -24.1, -25.5 forecast, -26.9 previous
• Swiss ZEW Expectations (Jan): -4.7, 6.2 previous
• Italian Business Confidence (Jan): 89.2, 89.0 forecast, 88.5 previous
• Italian Consumer Confidence (Jan): 96.8, 97.0 forecast, 96.6 previous
Looking Ahead Economic Data (GMT)
•14:45 Canada BoC Interest Rate Decision 2.25% forecast,2.25% previous
•15:00 US Cushing Crude Oil Inventories: 1.478M previous
•15:00 US Texas Services Sector Outlook (Jan): -3.3 previous
•15:00 US Dallas Fed Services Revenues (Jan): 0.1 previous
•15:00 US Gasoline Production: -0.246M previous
Looking Ahead Economic Data (GMT)
•18:00 ECB's Schnabel Speaks
•19:00 US Fed Interest Rate Decision 3.75% forecast,3.75% previous
•19:00 USFOMC Statement 19:30 previous
•US FOMC Press Conference
Currency Summaries
EUR/USD : EUR/USD : The euro dipped on Wednesday as dollar rebounded ahead of Federal Reserve rate decision. The Fed is expected to hold rates steady at a meeting overshadowed by a Trump administration criminal investigation of U.S. central bank chief Jerome Powell, an evolving effort to fire Fed Governor Lisa Cook, and the coming nomination of a successor to Powell in May.Meanwhile, Two European Central Bank officials said on Wednesday the strength of the euro could influence monetary policy. Austrian central bank governor Martin Kocher told the Financial Times the ECB may have to consider another interest-rate cut if the strength of the euro starts to affect the outlook for inflation.The euro fell by as much as 0.63% to a session low of $1.19623. It was last down 0.5% on the day at $1.19715, but still set for a 2% gain this month. Immediate resistance can be seen at 1.2047(23.6%fib), an upside break can trigger rise towards 1.2065(Higher BB).On the downside, immediate support is seen at 1.1939 (38.2%fib), a break below could take the pair towards 1.1849(50%fib).
GBP/USD: Sterling slipped slipped lower on Wednesday as greenback rebounded ahead of a Federal Reserve monetary policy decision.The Federal Reserve is expected to keep rates unchanged on Wednesday, with investors anticipating the pause to extend beyond Jerome Powell’s final meetings in March and April, as policymakers remain divided over the need for further rate cuts ahead of his successor taking office this summer. Recent data showed the U.S. unemployment rate slipped to 4.4% in December despite soft job growth, while economists expect core PCE inflation to rise to 3% year-on-year, well above the Fed’s 2% target. The Fed will release its policy decision at 2 p.m. EST (1900 GMT), and Powell is scheduled to begin a press conference half an hour later to elaborate on the rate decision and economic outlook. Immediate resistance can be seen at 1.3848(38.2%fib), an upside break can trigger rise towards 1.3889(Higher BB).On the downside, immediate support is seen at 1.3691(38.2%fib), a break below could take the pair towards 1.3572(50%fib).
AUD/USD: The Australian hovered near three year peak on Wednesday as investors digested Australian inflation figures. Australia’s underlying inflation ran at a faster-than-expected pace in the December quarter, adding to a recent slew of hot economic data that has investors baying for an interest rate hike as soon as next week.Australia’s trimmed mean CPI, a key measure of core inflation, rose 0.9% quarter-on-quarter in Q4, exceeding economists’ forecast of 0.8%, ABS data showed.The RBA cut rates three times last year to 3.6%, but with inflation picking up again, policymakers have signaled the easing cycle may be over and the next move could be a rate hike rather than a cut.Deputy Governor Andrew Hauser said the central bank would not base decisions on a single inflation print and would not automatically raise rates even if the trimmed mean hit 1%, emphasizing that policy will be guided by overall economic conditions. Immediate resistance can be seen at 0.7016(23.6%fib), an upside break can trigger rise towards 0.7042(Higher BB).On the downside, immediate support is seen at 0.6928(38.2%fib), a break below could take the pair towards 0.6680 (50%fib)
USD/JPY: The U.S. dollar edged higher but gains were limited as traders digested minutes from the Bank of Japan’s December meeting.Minutes from the Bank of Japan’s December meeting showed policymakers flagged rising inflation pressures driven by a weak yen and labour shortages as key factors influencing the timing of further interest rate hikes.The board signaled it is ready to keep raising rates despite already lifting the policy rate to a 30-year high of 0.75% in December.The minutes showed the nine-member board agreed that future rate hikes would depend on economic conditions and whether inflation forecasts are realized.A weak yen has raised concerns for policymakers, as it increases living costs for households a key issue ahead of Japan’s general election on February 8. Immediate resistance can be seen at 154.14(50%fib) an upside break can trigger rise towards 156.36(38.2%fib) .On the downside, immediate support is seen at 152.09(50%fib) a break below could take the pair towards 151.28 (Lower BB).
Equities Recap
European shares were on track to snap a two-day rally on Wednesday, after LVMH's cautious tone pressured luxury stocks and eclipsed gains in ASML .
At (GMT 13:38),UK's benchmark FTSE 100 was last trading down at 0.48 percent, Germany's Dax was down by 0.61 percent, France’s CAC was last down by 1.22 percent.
Commodities Recap
Gold prices rose above $5,300 per ounce for the first time on Wednesday as weakening confidence in the U.S. dollar and concerns around the independence of the U.S. Federal Reserve boosted demand for the safe-haven metal.
Spot gold jumped 1.5% to $5,266.22 an ounce by 1225 GMT after touching a record $5,311.31. Prices gained more than 3% in the previous session.
U.S. gold futures for February delivery jumped by 3.5% to $5,260.40 an ounce.
Oil prices climbed to their highest level since late September on Wednesday, supported by U.S. output disruptions from a winter storm, a weaker dollar, and ongoing supply outages in Kazakhstan.
At 1403 GMT, Brent crude futures had ticked up 92 cents, or around 1.4%, to $68.49 a barrel. U.S. West Texas Intermediate crude was up $1.04, or around 1.7%, at $63.43.
