EUR/USD: Trading in a narrow range as declining US yields

KBC Market Research Desk KBC Bank

Currencies

EUR/USD

EUR/USD trading in a narrow range as declining US yields and global uncertainties are keeping the dollar balanced.

EUR/GBP

Sterling under heavy siege as PM May pulled the crucial Brexit vote to avoid a humiliating defeat in Parliament. She seeks more EU concessions to convince MP’s.

USD/JPY

USD/JPY trades surprisingly flat in a tight 112-114 range given the volatility uptick in global markets.

EUR/CZK

Weaker than expected Q3 GDP growth (2.4% YoY) and political uncertainty kept the Czech koruna near 2018 lows in November, despite 4 consecutive interest rate hikes.

EUR/HUF

EUR/HUF found higher ground following Orban’s election victory and during the emerging market turmoil but entered relatively calmer water afterwards. Mood swings in the pair are losing momentum.

EM Index

The basket of EM currency’s recovery stalls after a swift uptick in August. Global uncertainty and volatility keeps most EM in the defensive position.

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KBC Market Research Desk

KBC Bank

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.