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  • Writer's pictureMike Paterson

Bring on the Fed

Wednesday 31 January 2024

Yesterday's US JOLTS job openings data headlines for December showed a bigger increase than expected but softer detail provided some balance. Cue a Greenback spike before retreating providing welcome volatility as we contine to range tightly ahead of the all-important US Federal Reserve policy announcement and presser this evening.

This morning's German Retail Sales and French inflation data have come in well below expectations confirming ECB rate cut expectations. Regional German inflation data coming in under expectations so far too. US ADP out later. The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Red Sea tensions still casting their own shadow and providing some risk appetite fragility.

Equities remain underpinned despite retreating in late NY trading but relatively steady as I type. WTI has dropped back from $78.00 this time with sellers poised still but holding $77.00 so far with Red Sea concerns, and technicals offering some decent support again. Gold steady between $2033-2043 as we continue to range tightly.

GBPUSD: Holding 1.2640 in yesterday's rapid retreat on the initial US Jolts Greenback rally but capping into 1.2700 this time on the bounce and falling back to test 1.2660-65. I remain poised for further sells when momentum fades while we continue to range. BOE tomorrow in focus as well as FOMC today. EURGBP: Holding 0.8520 after capping at 0.8570 yesterday and still looking soft overall with bets on BOE holding interest rates for longer than ECB. GBPJPY: Capping this time at 187.50 but holding 186.50 this time amid fragile risk conditions and some general JPY demand. We can expect rally sellers to remain poised amid all the uncertainty in these ever fickle markets.

EURUSD: Decent support/bids coming in around 1.0800 again in the retreat this morning amid some general EUR supply again but still capping 1.0840-50. I remain a rally seller. USDJPY: Capping around 147.90 but holding 147.10-20 in the retreats still. I remain a rally seller as preferred side overall.

For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email

Interbank rates: 08.47 GMT

GBPUSD    1.2688

EURUSD    1.0832

EURGBP    0.8535

GBPEUR    1.1714

USDJPY    147.52

GBPJPY    187.18

GBPCAD    1.7016

GBPCHF    1.0934

GBPZAR    23.7162

GBPHKD    9.8777

USDCHF    0.8622

EURCHF    0.9338

EURHKD    8.4280

AUDUSD    0.6586

NZDUSD    0.6127

USDCAD    1.3414

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