The USD still stays comfortably anchored near multi-year highs; XAUUSD continues to hover around the $4,100 area; EURUSD eased by around 0.45%, leaving the pair trading close to 1.14140; Bitcoin slipped back below $63,000.
- Markets have now largely reconciled themselves to the idea that the Fed is not merely in any hurry to cut rates, but may yet be prepared to tighten further should inflation prove stubborn.
- Following the recent decline, gold has entered something of a holding pattern.
- The euro has failed to build any meaningful momentum, with each attempt to recover running into renewed demand for the greenback.
- Bitcoin made another attempt to overcome resistance near $65,500, though buyers once again failed to gain sufficient conviction.
Today’s focus
FX snapshot
XAUUSD
A firm USD and higher real yields continue to act as a headwind, whilst persistent uncertainty surrounding the global outlook and geopolitics continues to underpin demand for gold.
EURUSD
Currently, any rebounds in EURUSD appear corrective rather than the beginning of a broader reversal.
BTC
Bitcoin slipped, reflecting the cautious tone that still dominates the digital asset area.
Market sentiment
Today’s attention will turn towards the release of the preliminary PMI figures from the UK, the eurozone area and the US. The publication of these reports is likely to shape sentiment throughout the day. Stronger data could reinforce expectations that interest rates would remain elevated for longer, providing further support for the USD. Conversely, the evidence of slowing activity may once again revive discussions surrounding future monetary easing.
