Market News

Currency Watch: UoM Consumer Sentiment Surge

UoM sentiment surge

Explore the repercussions of the UoM sentiment surge, decoding its impact on global markets and currency movements.

The University of Michigan (UoM) has reported a remarkable 13% surge in consumer sentiment for January, reaching its peak since July 2021. Consumers’ growing confidence that inflation has turned a positive corner, coupled with strengthened income expectations, is credited with this surge in positivity.

Notably, the inflation expectations component has eased further from 3.1% YoY in December to 2.9% YoY in January. The Dollar Index (DXY) experienced fluctuations, hitting a high of 103.55 before settling at 103.24 by the end of last week. Despite this, the DXY has rebounded strongly from its December low of 100.60, surpassing the 103 level in 2024.

Asia Session Implications

At the opening of today’s session, the DXY hovered around 103.28, witnessing a subsequent decline. Meanwhile, spot gold prices remained buoyant, increasing towards $2,030/oz. Crude oil prices faced downward pressure, with WTI oil slipping below $73 per barrel as Asian markets commenced trading.

Dollar Index (DXY) Outlook

Key News Events Today: CB Leading Index (3:00 pm GMT)

In December, The Conference Board will release its Leading Economic Index (LEI), indicating a contraction of 3.5% between May and November 2023. A decline in the December LEI could exert downward pressure on the dollar, particularly if it exceeds expectations.

Central Bank Notes

  • The Federal Funds Rate target range remains unchanged at 5.25% to 5.50%.
  • The Committee focuses on achieving maximum employment and 2.0% inflation in the longer run.
  • The next meeting is scheduled from January 30 to 31, 2024.

Next 24 Hours Bias: Medium Bearish

Gold (XAU) Expectations

Key News Events Today: CB Leading Index (3:00 pm GMT)

The release of the Leading Economic Index (LEI) influences gold prices like the DXY. A stronger-than-expected decline in LEI could exert downward pressure on the dollar, boosting gold prices.

Next 24 Hours Bias: Weak, Bullish

Currency Watch: UoM Consumer Sentiment Surge

Australian Dollar (AUD) Analysis

No Major News Events Today

The Australian Dollar (AUD) has declined sharply over the past three weeks but opened strongly today, surpassing the 0.6600 threshold. The Reserve Bank of Australia (RBA) maintained the cash rate target at 4.35%, signaling a medium bullish bias.

Next 24 Hours Bias: Medium Bullish

New Zealand Dollar (NZD) Overview

No Major News Events Today

The Kiwi Dollar (NZD) has seen a 3.3% decline in 2024 but opened strongly today, approaching 0.6150. The Monetary Policy Committee kept the OCR unchanged at 5.50%, with a medium bullish bias expected in the next 24 hours.

Next 24 Hours Bias: Medium Bullish

Japanese Yen (JPY) Forecast

No Major News Events Today

The Japanese Yen weakened considerably at the beginning of 2024, causing USD/JPY to surge. However, analysts expect it to dip under the 148 threshold during the Asia session.

Next 24 Hours Bias: Weak Bearish

Euro (EUR) Analysis

No Major News Events Today

The Euro weakened in 2024 but opened strongly today, indicating a weak bullish bias. The European Central Bank (ECB) kept key interest rates unchanged, emphasizing a data-dependent approach.

Next 24 Hours Bias: Weak, Bullish

Swiss Franc (CHF) Expectations

No Major News Events Today

The Swiss Franc weakened at the beginning of 2024, causing USD/CHF to surge. Despite strong bullish momentum, USD/CHF may face resistance at 0.8700.

Next 24 Hours Bias: Weak, Bullish

British Pound (GBP) Outlook

No Major News Events Today

The Pound faced resilience against a strong dollar in 2024 but experienced a decline on Friday. Despite this, it rebounded strongly and is likely to remain elevated today.

Next 24 Hours Bias: Medium Bullish

Canadian Dollar (CAD) Forecast

No Major News Events Today

More robust demand for the US dollar drove USD/CAD past 1.3500, but the Loonie pulled back sharply on Friday. USD/CAD tumbled under 1.3450 as markets re-opened, indicating a medium bearish bias.

Next 24 Hours Bias: Medium Bearish

Oil Market Analysis

No Major News Events Today

Despite increased projections for global crude demand in 2024, crude oil prices remain under pressure due to concerns about sluggish economic growth. Ongoing geopolitical tensions could continue to influence oil markets.

Next 24 Hours Bias: Medium Bearish

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