Market Drivers – US Session, January 30

Mohamed Abdelhamid 31 January, 2024 2:29 am Forex Market, Market Update

WTI crude oil was 1.35% higher, trading at $77.82 per barrel following a sharp correction decrease on Monday. The price of crude oil rebounded, bolstered as always by enduring geopolitical concerns in the Middle East and the Red Sea conflict.

The week began well for gold prices, which briefly tested the $2050 zone, or multi-day highs, and eventually the yellow metal was trading at $2036.50 per ounce, down -0.02%. Conversely, silver partially reversed Monday’s big increase.

The US dollar has remained unchanged in the 103.40 range, while EUR/USD was able to gain additional ground and retest the mid-1.0800s given the alternating risk-appetite patterns that preceded FOMC day.

Economic Data

The number of job openings on the last business day of December stood at 9.02 million, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday. This reading followed 8.92 million (revised from 8.79 million) openings in November and came in above the market expectation of 8.75 million.

A positive surprise in JOLTs Job Openings coupled with an improvement in Consumer Confidence tracked by the Conference Board seem to have been insufficient to spark some reaction in the US dollar, which yielded to the pre-FOMC’s decision day.

Key Developments

The Fed’s meeting is broadly anticipated to leave its monetary conditions unaltered, while attention is expected to shift to Chair Powell’s press conference and to any hint of the timing of a potential interest rate cut.

Previously, ADP was expected to report on job creation by the US private sector, seconded by the publication of the Employment Cost Index.

In the Eurozone, attention will shift to Germany, with the release of Retail Sales and the labour market reports for January, followed by the advanced Inflation Rate for the first month of the year. EUR/USD has been gathering some traction since last Friday, although its short-term price action is expected to largely depend on Fed dynamics.

GBP/USD traded on the defensive and returned to the sub-1.2700 zone despite the dollar’s irresolute price action. Looking at Wednesday’s docket, housing prices measured by Nationwide will be the only release of note.

The USD/JPY reversed Monday’s drop and showed slight gains at the 148.00 level during more sidelined trading. The BoJ Summary of Opinions, Retail Sales, Flash Industrial Production, Housing Starts, and January Consumer Confidence are all scheduled for release on Wednesday in Japan.

Ahead of the crucial RBA meeting next week, traders in Australia will be eagerly monitoring the release of the Q4 Inflation Rate and the December Monthly CPI Indicator. Furthermore, consideration should be given to China’s NBS Manufacturing and Non-Manufacturing PMIs. Meanwhile, the AUD/USD pair remained in a consolidating attitude near the 0.6600 zone.

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