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  • Writer's pictureMike Paterson

Greenback grabbing returns

Wednesday 3 January 2024

Yesterday I noted some USD demand returning as I was writing my update and we duly saw that continue helped by firmer US bond yields as markets rebalance some extended moves into the end of December.

The Ukraine/Russia war and the Red Sea disruptions/fallout continue to accelerate while the ongoing Middle East Israel/Hamas back-story casts its own shadow over markets and traders are still second-guessing the rate/extent of CB interest rate cuts in the months ahead too. US Jolts and ISM Manufacturing data on the slate at 15.00 GMT then FOMC Minutes to be released at 19.00 GMT.

Equities fell then rallied only to fall again but finding some dip demand this morning with the jury still out on the speed of cuts by FOMC et al. WTI sellers remain poised amid global demand concerns and capped at $73.00 but holding $69.75 in the latest retreat amid some ongoing Red Sea interruption concerns. Gold still basing at $2050 and still underpinned but failing into $2070 for the moment amid some profit-taking and better risk tones again.

GBPUSD: Capping at 1.2750 but holding 1.2600 in yesterday's welcome retreat and some pips banked per my tweet with decent support expected down there. A decent move in the right direction to shake off a few festive cobwebs. I remain poised for further rally sells when momentum fades but caution still required as we range tightly. EURGBP: Two-way business still being seen and expected amid the BOE/ECB rate cut speculation holding 0.8660 this morning after capping at 0.8680. GBPJPY: Broke down through that decent support at 179.00 yesterday amid the softer risk tones and general GBP supply but dip demand on core pairs forming a base at 178.80 here. Now back up to 180.30 we can expect rally sellers to remain poised amid all the uncertainty.

EURUSD: Support at the old 1.0930 area in yesterday's retreat amid the USD demand but capping at 1.0965 as the jury out still amid all the CB conjecture and cross flows. I remain a rally seller overall. USDJPY: Finding support at 141.50 yesterday and on the rise through 142.60 as I type amid the general USD demand. I remain a rally seller as preferred side overall and remain poised when momentum fades.

For more detailed analysis across a variety of pairs email

Interbank rates: 08.22 GMT

GBPUSD    1.2641

EURUSD    1.0953

EURGBP    0.8662

GBPEUR    1.1542

USDJPY    142.57

GBPJPY    180.25

GBPCAD    1.6836

GBPCHF    1.0750

GBPZAR    23.6460

GBPHKD    9.8465

USDCHF    0.8508

EURCHF    0.9318

EURHKD    8.5310

AUDUSD    0.6752

NZDUSD    0.6257

USDCAD    1.3329

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