Market Drivers – US Session 13/01/2023

The US Dollar Index (DXY), which measures the buck’s performance against a basket of six rivals, erases its earlier gains, down 0.04%, at 102.201.

During the session, the USD/CHF cleared the 20-day EMA at 0.9293 and cleared the 0.9300 mark. Nevertheless, as the dollar weakened, the major retreated those gains and is tumbling to fresh two-day lows around 0.9255.

Gold price is hovering around $1,920 on Friday, hit a new 9-month high as investors anticipate the US central bank to adopt a less aggressive stance following Thursday’s softer inflation data. Bets for a 25-bps rate hike by the Federal Reserve lie at a 94.2% chance after the release of US inflation. The Gold Index is trading at $1,919.52, gains 1.20%, headed for a fourth consecutive week of gains.

WTI crude oil struggles to extend its recovery towards $79.00 and optimism remains on softer US inflation.

Economic Data

The University of Michigan’s survey showed that consumer sentiment improved, as it exceeded estimates of 60.5, hitting 64.6. In the same poll, inflation expectations for one year were revised to 4% from 4.4% in December, while for a five-year horizon, inflation is foreseen to hit 3% from 2.9% in the previous month.

Key Developments

Wall Street has resumed its uptrend after a brief hiccup that witnessed the S&P 500 and the Nasdaq turning red.

Thursday’s release of softer inflation in the United States (US) spurred hopes for a less aggressive US Federal Reserve (Fed); hence the US Dollar (USD) weakened.

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