The wait for FOMC continues

Tuesday 30 January 2024

The wait for FOMC continues

It's a case of more of the same with FX currency pairs still ranging as we wait on the US Fed tomorrow plus we have the BOE on Thursday with mixed USD tones and month-end signals still pointing to modest USD supply except in USDJPY. Yesterday's US Treasury quarterly borrowing needs slightly better than expected and as bond yields moved lower so did the Greenback with USDJPY leading the way but some USD demand returning in Asia and early Europe.

Today brings US JOLTS job openings data for December at 15:00 GMT where a modest increase is expected but high frequency data has shown openings declining recently. The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Red Sea tensions still casting their own shadow and providing some risk appetite fragility.

Equities remain underpinned still with Nasdaq and S&P posting new record high and holding gains as I type. WTI has dropped back from $78.30-50 with sellers poised still but holding $76.50 with Red Sea concerns, and technicals offering some decent support again. Gold has been rising again to to post recent highs of $2040 after support this time into $2025-30 as we continue to range tightly.

GBPUSD: Holding 1.2660 in yesterday's retreat but capping into 1.2720 this time on the USD-led rally and falling to 1.2680 as I type helped by some GBPJPY supply. I remain poised for further sells when momentum fades while we continue to range. BOE on Thursday in focus. EURGBP: Holding 0.8510-15 and now posting 0.8535 but still looking soft overall with bets on BOE holding interest rates for longer. GBPJPY: Capping this time at 188.00 and an extended fall to 186.80 this time amid USDJPY retreat and fragile risk conditions. We can expect rally sellers to remain poised amid all the uncertainty in these ever fickle markets.

EURUSD: Support coming in at 1.0790-00 this time amid some general EUR supply again before a bounce to 1.0840 on the USD supply only to pull back to 1.0820. I remain a rally seller. USDJPY: Capping around 148.00 but holding 147.20 in the retreat and I remain a rally seller as preferred side overall.

For more detailed analysis across a larger number of FX pairs email mike@mspfx.co.uk

Interbank rates: 08.45 GMT

GBPUSD    1.2689

EURUSD    1.0822

EURGBP    0.8528

GBPEUR    1.1723

USDJPY    147.42

GBPJPY    187.05

GBPCAD    1.6977

GBPCHF    1.0940

GBPZAR    23.9228

GBPHKD    9.8738

USDCHF    0.8625

EURCHF    0.9335

EURHKD    8.4226

AUDUSD    0.6602

NZDUSD    0.6131

USDCAD    1.3408