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  • Writer's pictureMike Paterson

FOMC in focus

Wednesday 13 December 2023

Yesterday's US CPI data headlines came in as expected which initially caused a sell-off in the Greenback but then some deeper analysis brought about a reversal and the jury remains out with US PPI today at 13.30 GMT before the main event with the US Fed FOMC decision at 19.00 GMT. Rates will be left on hold but all eyes will be focussed on clues for when/how fast we get rate cuts next year. More central banks with SNB, BOE and ECB tomorrow followed by BOJ next Tuesday.

The ongoing Middle East back-story sadly continues meanwhile and casts its own shadow over markets but still not driving prices This morning's UK GDP and manufacturing data was a little soggy this morning and given the Pound another knock lower but all relative still in these tight markets.

Equities rallied in NY yet again and once more steady on their highs in Asia/early European trading with the jury still out ahead of FOMC. WTI has capped at $71.50 this time as sellers remain poised amid global demand concerns and now testing $68.00, levels not seen since June. Gold trading tightly $1973-83 with the jury still out.

GBPUSD: Holding 1.2515 in this morning's retreat post-data after capping at 1.2560 helped by the return of some GBPJPY supply and general GBP correction ahead of the central bank action in the next 24 hours. I remain poised for further rally sells when momentum fades. EURGBP: Support at 0.8585 this time amdi some general GBP supply and now heading through 0.8600 amid the weaker UK data. Jury still out but CB rate divergence in play for the moment plus other cross flows. GBPJPY: Capping at 183.15 amid some JPY demand/GBP supply double whammy but holding 182.50. Sellers remain poised but all more finely balanced still after last week's shakeout.

EURUSD: Support around 1.0780 currently but capped by the offers building into 1.0800 that I warned of yesterday. I remain a rally seller overall. USDJPY: Capping at 146.00 now after holding 145.50 as we range tightly into FOMC. I remain a rally seller as preferred side overall at these still elevated levels.

For more detailed analysis across a variety of pairs email

Interbank rates: 08.34 GMT

GBPUSD    1.2528

EURUSD    1.0784

EURGBP    0.8607

GBPEUR    1.1620

USDJPY    145.92

GBPJPY    182.79

GBPCAD    1.7027

GBPCHF    1.0976

GBPZAR    23.8704

GBPHKD    9.7531

USDCHF    0.8763

EURCHF    0.9450

EURHKD    8.3933

AUDUSD    0.6552

NZDUSD    0.6086

USDCAD    1.3602

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