Bank of England’s Bailey in Spotlight: Will He Squash Market Hopes for Early Rate Cuts? Dollar Rules as Fed Hawks Turn Dovish Bets Cold. Aussie Back from the Brink, Shines Amid Cooling CPI. BoJ Holds Steady, Weak Wages Keep Yen Under Pressure
Market Moves:
- British Pound: Eyes on BoE Chief testimony for clues on future rate policy. Pound holds near five-month high despite market expectations of BoE rate cuts later than the Fed.
- Australian Dollar: Rises after CPI eases, signaling less need for further rate hikes. Aussie rebounds from recent dip despite inflation concerns.
- Japanese Yen: Tumbles on weak wage data, supporting BoJ’s dovish stance. Dollar surges against yen as Fed hints at slower pace of rate cuts.
Pound Sterling:
- Slightly up against the US dollar, awaiting Governor Bailey’s testimony before Parliament.
- Investors looking for clues about the Bank of England’s future rate decisions.
- Most expect rate cuts later than the US Federal Reserve, but some analysts are skeptical.
Australian dollar:
- Rises after November inflation data shows a slowdown.
- Reserve Bank of Australia likely to hold rates steady for now.
- Aussie dollar has lost some ground in January due to a stronger US dollar.
Japanese yen:
- Takes a tumble on weak wage growth data.
- Bank of Japan unlikely to change its ultra-loose monetary policy soon.
- Dollar has gained significantly against the yen in January.
Key Points:
- BoE Governor Bailey testifying today, focus on his views on future rate hikes.
- Australian CPI cools, RBA likely to hold rates.
- Japanese wage growth sputters, BoJ unlikely to tighten policy soon.
- US dollar strengthens despite Fed’s pivot towards slower rate hikes.
Technical Analysis:
- GBP/USD testing resistance at 1.2722, support at 1.2678.
- AUD/USD testing resistance at 0.6700, support at 0.6664.
- USD/JPY breaks above resistance at 145.37, support at 144.17.
Categories: Market News
