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GBP Rallies On Optimistic BOE

Jan 31 2020, 08:59 PM (BDT) |

Fed Sounds More Cautious

The US Dollar has had a muted start to the final trading day of the week. Following a more cautious tone from the Fed on Wednesday, the dollar has softened a little though the USD index is still above the broken bearish trend line for now at 97.73 last. The meeting itself was muted with the Fed reiterating its message that it will continue to monitor data and developments.

EUR Higher on USD Weakness

EURUSD has been a little firmer today, benefiting from the weakness in USD. The 1.10 level was able to hold as support this week, keeping EUR bid. However, the near term outlook remains tilted to the downside and a break of the level seems likely. The Eurozone CPI estimate this moring printed in line with expectations at 1.4%.

BOE Sounds more Optimistic

GBPUSD has softened a little today though ends the week higher on the back of the BOE meeting this week which saw the bank taking a much more constructive stance on the economy. Despite dovish comments recently, the BOE sounded much more upbeat on the economy and held off from a rate cut.

Volatile Week For the SPX500

Risk assets have been lower again today though over a volatile week have been able to claw back losses, to end the week higher than the open. The ongoing corona-virus situation is keeping the outlook obscured for now with SPX500 trading 3279.43 last, still lower than last week following the gap down at the open this week.

JPY & Gold End Strong

Safe havens have both been firmer again today, ending the week in the green as traders look to move into safer assets ahead of the weekend. Both JPY and gold have been higher against USD. XAUUSD trades 1580 last while USDJPY trades 108.96.

Crude Testing Support

Oil prices have been lower again today and are ending the week firmly lower. Reduced demand expectations in light of the corona-virus outbreak, as well as the EIA reporting a large inventories build, has kept crude sentiment skewed lower this week. Crude trades 52.18 last, fighting to stay above the 52.17 level for now.

Loonie Lift-Off Continues

USDCAD continues to rally today with price pushing further above the broken 1.3207 level to trade 1.3241 last. The slide in crude has weighed heavily on CAD, keeping the loonie well bid. Looking ahead today, Canadian GDP is the main data reading to watch.

Aussie Near 2019 Lows

AUDUSD has been sharply lower again today, extending losses across the week, and is now close to testing the 2019 lows around .6671. Traders are widely expecting the RBA to ease next week, in line with recent commentary, keeping AUD sentiment tilted to the downside.

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