An update about rockets, rocking crypto and a rolling Dollar

Frank Walbaum FX Strategies.Asia

Important News the week

Tue, 19th, 14:30 CET CA consumer price index.
Wed, 20th, 08:00 CET UK consumer price index.
Thu, 21st, 14:30 CET US Unemployment claims.
Fri, 22nd, 09:30 CET DE purchasing manager index.
Fri, 22nd, 15:45 CET US Flash PMI.

G20 summit

The Summit commenced today in Rio de Janeiro, with global leaders convening to address pressing international issues. Turkish President Recep Tayyip Erdoğan has advocated for initiating peace talks, suggesting that current territorial lines serve as the basis for negotiations. This stance aligns with the broader diplomatic efforts observed at the summit. The impending transition to President-elect Donald Trump's administration is anticipated to influence future policy directions, adding a layer of complexity to the discussions.

Market talk

The United States has authorized Ukraine to utilize long-range missiles capable of striking targets within Russia. This development has elicited a stern response from Russian President Vladimir Putin, who has warned of potential retaliatory measures, including the use of nuclear weapons, should Russian territory be attacked. The escalation in geopolitical tensions has led to increased volatility in financial markets. Gold prices have risen as investors seek safe-haven assets amid the uncertainty. Conversely, stock markets concluded last week with declines, indicating that the recent optimism associated with the U.S. presidential transition may be waning.

Tendencies in the markets

Equities lower, USD sideways, cryptos positive, oil weaker, metals schwächer, JPY sideways.

Author

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

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.