Dollar Strengthens in Asian Session as Gold Faces Downward Pressure

The dollar strengthens in the Asian session as gold faces downward price pressure. Stay updated on market dynamics and critical events.

In the absence of US market activity due to the Martin Luther King Day observance, the trading session on January 16, 2024, witnessed a subdued atmosphere. The dollar index (DXY) maintained stability around 102.50, and spot gold struggled to breach the $2,060/oz mark.

Asian Session Unfolds with DXY Surge and Gold Decline

As the Asian markets opened, the Dollar Index (DXY) exhibited robust growth, reaching 103. Simultaneously, gold prices experienced a dip below $2,050/oz, while crude oil prices showed minimal fluctuations from Monday’s session.

Key Events and Expectations

Dollar Index (DXY)

• Empire State Manufacturing Index (1:30 pm GMT)
• FOMC Member Waller Speaks (4:00 pm GMT)

Anticipated Factors

• With a December slump, New York’s manufacturing activity hints at a potential decline in January. A weaker-than-expected reading might impact the dollar negatively.
• Federal Reserve Governor Christopher Waller’s speech at the Brookings Institution could influence the dollar, mainly if it contains hawkish elements.

Gold (XAU)

• Empire State Manufacturing Index (1:30 pm GMT)
• FOMC Member Waller Speaks (4:00 pm GMT)

Anticipated Factors

• Similar to DXY, New York’s manufacturing activity will play a role in influencing gold prices.
• Waller’s speech may impact gold prices based on the tone regarding the economic outlook and monetary policy.

Dollar Strengthens in Asian Session as Gold Faces Downward Pressure

Australian Dollar (AUD)

• No major news events

Anticipated Factors

• The Australian Dollar started the session weakly, falling below 0.6650. The trend suggests continued pressure on the currency.

Kiwi Dollar (NZD)

• No major news events

Anticipated Factors

• The New Zealand Dollar experienced significant declines below 0.6200, with potential further drops towards 0.6150.

Japanese Yen (JPY)

• No major news events

Anticipated Factors

• USD/JPY may attempt to surpass the 146 threshold with a strong demand for the dollar in the Asian session.

Euro (EUR)

• ZEW Economic Sentiment (10:00 am GMT)

Anticipated Factors

• Improved economic sentiment in the Eurozone might act as a bullish catalyst for the Euro.

Swiss Franc (CHF)

• No major news events

Anticipated Factors

• The Swiss Franc weakened, causing the USD/CHF to rise. Continued demand for the dollar may push the currency pair towards 0.8600.

Pound (GBP)

• Labour Market Report (7:00 am GMT)
• BoE Gov Bailey Speaks (3:00 pm GMT)

Anticipated Factors

• Cooling in the UK labor market may result in strong selling pressures on the Pound.
• BoE Governor Bailey’s statements on monetary policy outlook could influence the direction of the Pound.

Canadian Dollar (CAD)

• CPI (1:30 pm GMT)

Anticipated Factors

• A forecasted stall in the downward inflation trend in Canada could serve as a short-term bearish catalyst for USD/CAD.

Oil

• No major news events

Anticipated Factors

• Crude oil prices increased slightly due to ongoing geopolitical tensions in the Middle East. Ship-tracking data revealed diversions from the Red Sea, impacting WTI oil prices.

Next 24 Hours Bias

• DXY: Medium Bullish
• Gold: Weak Bearish
• AUD: Strong Bearish
• NZD: Strong Bearish
• JPY: Medium Bullish
• EUR: Medium Bearish
• CHF: Medium Bullish
• GBP: Medium Bearish
• CAD: Medium Bullish
• Oil: Weak Bearish

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