Risk appetite was on the rise yesterday with equities attempting to retrace the losses suffered at the start of the year. To no surprise, USD lost out as price action remains in the steady November downtrend. Earlier in the day, eurozone retail sales, consumer confidence and economic confidence numbers came in marginally better than expected.
* Daily move - against G10 rates at 7:30am, 09.01.24
** Indicative rates - interbank rates at 7:30am, 09.01.24
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Today's calendar is light once again, so safe to repeat what we said yesterday, where the wider risk appetite will determine FX flows today as well. GBP remains well supported in this risk-on environment, as well as interest rate expectations favouring fewer cuts by the BoE this year. If you feel you wish to take advantage of any further potential gains for GBP, then please contact our dealing desk on dealingdesk@equalsmoney.com to place a limit order.
USD remains in its November downtrend despite attempts during Friday's volatile trading session for the greenback to breakout out of it, as 10-year US treasury bond yields broke through 4%. However the “Bond King” Bill Gross, expressed caution last night, suggesting that 10-year bonds at this level are overvalued, thus suggesting room for the yield to drop and thus weaken the USD. Thursday's inflation numbers will be key in determining the outlook for US treasuries and USD.
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