MARKET ANALYSIS

XAU

The bright metal began the new week in a quiet manner but managed to post three straight daily gains before losing its traction on Thursday amid the action in the US Treasury bond yields. Overall due to the absence of high-tier macroeconomic data releases, XAU/USD fluctuated in a tight range throughout the week around the $1965 per ounce mark.

JPY

Yen struggled to capitalize over a three-week high touched earlier on Monday and erased all gains on Tuesday amid release of the contenders' list for the successor of Bank of Japan (BoJ) Governor Haruhiko Kuroda. BoJ’s Kuroda has been maintaining an ultra-loose monetary policy for a prolonged period and the Japanese administration wants to make plans for an exit from this policy with the successor. However, the USD/JPY recovered some ground towards the end of the week, exchanging hands at around 130.90.

EUR

The European currency had a rough week during the previous trading week. EUR tried to rally on Monday but eventually fell hard and lost around 100 pips finishing the week around 1.0672.Prelim German inflation figures for January showed an increase of 0.1%. ECB members and President Langarde continued to view inflation as too high, supporting the hawkish policy outlook for the coming months.

GBP

Sterling traded in a narrow area last week showing signs of hesitation just above the crucial 1.20 level. GBP tried to rally on Wednesday after the Prelim Q4 GDP, industrial and manufacturing production, and trade data were announced but then rolled over to show signs of weakness yet again finishing the week around 1.2056.

AUD

Aussie climbed to near 0.6970 at beginning of the week after the decision of RBA to increase its cash rate by 25bps. AUDUSD broke above the psychological mark of 0.7000 on Thursday but ended up finishing the week around 80 pips lower because the quarterly prints of the Reserve Bank of Australia’s (RBA) Statement of Monetary Policy failed to impress buyers despite posting hawkish economic forecasts and readiness for further interest rate hike.

WEEK AHEAD