The CNB concluded its normalisation cycle

KBC Market Research Desk KBC Bank

Markets

EUR/USD: dollar took the upper hand again on decent eco data and as global optimism dwindled recently. Euro bulls have been betting on a recovery of the economy but that has not been confirmed by the data (yet).

Sterling's impressive rally stalled. The pound is now trapped within a narrow sideways range near 0.86 as markets await the election outcome on December 12.

The USD/JPY rebound starting in early September is running into resistance as the reflation trade loses momentum. 108 acts as short term intermediate support.

Brexit optimism has pushed the export oriented Czech koruna further higher before meeting with resistance at the low end of the 25.5-26 sideways range. The CNB concluded its normalisation cycle, but probably won't cut policy rates soon.

The Hungarian forint is again nearing all-time lows despite (very) solid growth. Rising inflation bites while the Hungarian central bank shows no willingness to raise rates anytime soon.

Emerging market currencies whipsawed, retracing earlier gains on trade optimism. Markets want to see action (i.e. signing of a partial trade deal) rather than just words.

Download The Full Monthly Chartbook

Author

KBC Market Research Desk

KBC Bank

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

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 climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

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.