Market participants chose to stay on the sidelines on Wednesday as the US inflation data looms. The Japanese Yen weakened despite an easing dollar as the BoJ made clear its point of staying on monetary policy easing until inflation is back to the 2% target as commented by the new Deputy Governor Shinichi Uchida. Traders await a rate decision from the Bank of Canada today.
USDCAD consolidated between 1.3450 and 1.3470 as the greenback continued to ease ahead of the US consumer Price Index. The CAD failed to take advantage of the dollar weakness as crude oil prices also weighed. In Canada, the central bank will be meeting today and is expected to keep interest rates unchanged at 4.50%. On the other hand, the FOMC meeting minutes will be published following the inflation data release, along with the IMF meetings. The pair was trading flat at +0.03% as buyers may seek 1.3500. On the downside, sellers may take out 1.3400.
EURGBP gained +0.13% in European trade ahead of speeches from central bank members of both countries. Traders maintained a rather low-risk appetite as they await data from the US. Vice President of the European Central Bank Luis De Guindos is set to speak later in the day.
Governor of the Bank of England Andrew Bailey has two speeches scheduled for today. The pair may rise to 0.8820 if bulls manage to breach the 0.8800 barrier while an extended rally may reinforce targets to 0.8858.
AUDNZD continued its 4-day rally by +0.10% as the Aussie showed more strength on a low-risk day. Earlier on Wednesday Statistics New Zealand released data showing that retail sales by electronic cards rose less than expected to 0.7% vs expectations of 1.5% and a previous print of -0.1%. The AUD took advantage of the Kiwi’s weakness to the dollar as traders await key data from the US for clear direction. The pair sits at 1.0740 daily low as bulls soar towards 1.0800.
European stocks traded higher on Wednesday despite low trading momentum in the European session. The DAX was up +0.13% from 15640 as bulls may reclaim 15800 in the short term. The UK100 soared +0.72% towards 7900. Further up buyers may seek 8050. The CAC40 surged +0.34% establishing a fresh high above 7400 yearly high.
US stock futures edged higher being helped by the stock market optimism ahead of the highly awaited US data. The DJIA futures gained +0.17% as bulls eye the 34000 level. Nasdaq 100 futures were up +0.14% caught in a tight range between 12928 and 13000. A breach above may give bulls 13200. S&P 500 futures rose +0.19% as it currently faces a hurdle at 4120.
Additionally, crude oil prices held on to steady gains following a subdued EIA energy outlook for 2023. The Energy Information Administration raised the forecast for crude oil prices in 2023 after OPEC announced its output cut. However, an extended rise may be capped by decreasing demand as shown by the building pile stock of 0.377 million vs -1.300 million expected by the American Petroleum Institute. Brent was up +0.36% with targets seen at $88.00 on the rise. The US WTI rose +0.27% as buyers may seek $84.00.