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The Yen strengthened as Kazuo Ueda, former BoJ policymaker, is likely to be the next BoJ governor. The UK avoided a recession as the country’s economy showed zero growth in the final quarter of 2022. Headline inflation in China eased in January although monthly inflation rose more than expected.
AUDJPY declined by -0.85% despite the hawkish RBA statement. The central bank warned of further tightening after raising its key rates by 25bps on Tuesday to 3.35%. The impact of this statement was weighed down by downbeat inflation data from China. Headline inflation in China slumped to 2.1% against a survey of 2.2% while the producer prices dropped to -0.8% vs -0.5% expected.
The Japanese Yen rose on reports that the Government is seeking an alternative to Masayoshi Amamiya who firmly declined the offer to become the Bank of Japan’s next Governor. The pair got rejected from the 91.50 high and supported by 90.20. A break below may renew bearish targets at 89.50 and 88.00.
GBPUSD traded -0.07% close to the 1.2100 mark after mixed data from the UK. The UK Gross Domestic Product came in line with estimates of 0.0% [QoQ] Q4 and 0.4% yearly figure. The monthly data, however, contracted to -0.5% vs -0.3% survey.
The production sector in the country realized more growth in December than anticipated at -5.7% vs -6.1% for industrial production and 0.0% vs -0.2% for manufacturing production. Focusing ahead, BoE’s Huw Pill will be speaking along with the release of the Michigan consumer sentiment. The cable fell from the 1.2140 intraday high and may be challenged by the 1.2050 low.
EURCAD dipped -0.49% from 1.4400 resistance ahead of Canada’s employment data. Statistics Canada is expecting only 15 000 people to have been employed in January against 104,000 people in the previous month. The unemployment rate is expected to rise to 5.1% from 5.0%. The commodity currency also benefited from rising oil prices on the day. A move below 1.4350 may sustain the bearish run to 1.4250. Looking ahead, ECB’s Isabel Schnabel will deliver a speech.
European stocks fell on Friday as recession fears grew after zero growth in the UK. The UK100 fell -0.32% from the 7913 high and is still challenged by the 7700 low. The CAC40 lost -0.59% after establishing a high at 7180 and sliding towards a 7100 psychological low and a 7000 low. The DAX dropped -0.68% falling towards 15200 from 15500.
US stock futures followed the European shares’ mood to end the week. US500 futures slumped by -0.61% seeking to revisit the 4000 low in the near term. US30 futures were down -0.27% from 33760 and may be challenged by 33300. US100 futures tanked by -1.16% as tech companies lead job cuts. Bulls are capped by 12400 and a few ticks away from the 12200 resistance-turned-support.
Additionally, gold prices ticked up on Friday as the greenback steadied ahead of the highly anticipated inflation data due next week. As of writing XAUUSD was up +0.12% trading between $1872 high and $1852.80 low. An extended move lower may set near-term targets at $1820 and $1800.
