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  • Writer's pictureMike Paterson

Market focus firmly on US CPI data

Tuesday 14 February 2023

Another 24 hours of mixed USD tones with yesterday's bullish start turning to some Greenback supply but with market focus definitely looking at today's US CPI reading for January at 13.30 GMT. WSJ's Timiraos has hinted at a bullish release but with everyone seemingly getting excited about a high number the risk might appear to be to the down side....

USDJPY has fallen back on the returning USD supply but some JPY demand returning too as the next BOJ Governor nomination officially becomes Ueda and now noises off-stage seemingly giving the hawks more encouragement. What a difference a day makes eh?

Equities are looking underpinned again this morning after a dip but some good tw0-way going on ahed of the CPI data. WTI is trading just above its retreat lows of $79.20 having failed at $80.75 but sellers poised into $80.00-50 again. Gold has held $1850-55 again but still tightly bound amid the uncertainty. Ukraine/Russia war continues to be the elephant in the room amid other geo-political risk. UK jobs/wages data this morning shows a tight labour market prevailing but real earnings still lagging inflation unsurprisingly. The data points to a 25bps BOE hike in March.

GBPUSD: Holding 1.2080 then 1.2120 on its rally yesterday but failing into 1.2180 for the moment although testing again as I type. EURGBP: Capping now at 0.8850 after another drop to 0.8825.Expect some more two-way trading as core pairs fluctuate. GBPJPY: Holding 159.50 before a climb to 161.25 and now holding 160.00-25 in the retreat. Sellers poised still amid the generally fickle risk sentimenmt.

EURUSD: Holding 1.0710-20 in the latest retreats with large option contract interest behind at 1.0700 and posting 1.0760 amid the general USD supply. USDJPY: Posting fresh recent highs yesterday but failing at the decent 132.80-00 resistance/offers but holding 131.80 so far in amid the USD supply/JPY demand double whammy. EURJPY: Capping into 142.50 this time amid the BOJ nomination JPY demand returning but with support now building at 141.50. Good two-way but looks underpinned still as core pairs find dip demand. USDCHF: Capping at 0.9240 and then the pivotal area around 0.9220 and now testing 0.9160 amid the general USD supply. EURCHF: Holding 0.9840-50 still but capping at 0.9860-70 so tightly bound still. SNB ever vigilant.

Plenty more to read in my full report and more detailed update for traders plus my 1-2-1 mentoring sessions. Mail for more info.

Interbank rates: 08.25 GMT

GBPUSD 1.2157

EURUSD 1.0733

EURGBP 0.8830

GBPEUR 1.1325

USDJPY 132.00

EURJPY 141.67

GBPJPY 160.45

GBPCAD 1.6248

GBPCHF 1.1165

GBPZAR 21.7242

GBPHKD 9.4882

EURCHF 0.9848

EURHKD 8.3781

AUDUSD 0.6963

NZDUSD 0.6336

USDCAD 1.3340

USDCHF 0.9175

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