Market Update - 05 December 2022

The index attempts a mild rebound in the mid-104.00s. The dollar drops to new 6-month lows near 104.00 earlier on Monday. ISM Non-Manufacturing, Factory Orders next of note in the US docket. The greenback, when tracked by the USD Index (DXY), appears to regain some poise early in the European morning around the 104.50 region on Monday. (FXStreet)

GBP/USD retreats from a multi-month top amid a modest intraday USD recovery. An uptick in the US bond yields and a softer risk tone underpin the safe-haven buck. A bleak outlook for the UK economy further contributes to capping gains for the pair. (FXStreet)

USD/JPY lacks any firm directional bias and oscillates in a narrow range on Monday. The underlying bearish sentiment around the USD continues to act as a headwind. An uptick in the US bond yields, the easing of COVID-19 curbs in China offer support. (FXStreet)

USD/CAD is at a make or a break near the round-levels support of 1.3400. Upbeat US Nonfarm Payrolls have failed to provide a cushion to the US Dollar. The Bank of Canada is set to hike its interest rates by 50 bps consecutively for the second time. USD/CAD is expected to deliver more losses on a breakdown of the Ascending Triangle pattern. (FXStreet)

EUR/USD scales higher for the fourth successive day and climbs to a fresh multi-month high. Bets for smaller Fed rate hikes continue to weigh heavily on the USD and remain supportive. Hopes for easing COVID-19 curbs in China further seem to undermine the safe-haven buck. Traders now look to the final Services PMI from the Eurozone and the US For a fresh impetus. (FXStreet)

AUD/USD has been accelerated above 0.6850 amid a cheerful market mood. A third consecutive 75 bps rate hike is expected from the RBA. Fed’s Evans sees a higher interest rate pace but has favored a deceleration in the interest rate hike pace. (FXStreet)

GBP/USD has refreshed its five-month high above 1.2340 and is expected to extend its rally amid a risk-on profile. After upbeat US NFP data, a better-than-projected US ISM Services PMI release may trigger a negative market impulse. Accelerated UK food inflation is impacting sentiment of households ahead of Christmas season. (FXStreet)

NZD/USD has been inching higher on the charts into daily resistance. China data capped the advance in NZD/USD on the release. Bears are lurking and eye a correction, but focus is on the greenback. (FXStreet)

Gold price corrects from a five-month high amid modest intraday US Dollar recovery move. Rebounding US Treasury bond yields revives the USD demand and weighs on the XAU/USD. Bets for less aggressive rate hikes by Federal Reserve should help limit losses for Gold price. (FXStreet)

Silver surrenders its intraday gains to the highest level since late April touched earlier this Monday. The technical setup still favours bullish traders and supports prospects for further appreciating move. A convincing breakdown below the 200-day SMA is needed to negate the near-term positive outlook. (FXStreet)

Brent crude oil has already seen some significant price action this Monday after OPEC+ met and concluded that production will remain at prior output levels. The decision came in the midst of other fundamental factors including China’s easing of COVID restrictions as well as the EU’s price cap on Russian oil. G7 nations settled on a $60 per barrel figure on seaborne Russian oil and countries who wish to purchase above this threshold can do so without the Western services such as insurance and transport. Russia in turn stated that they would not be accepting of the price cap which could bring into question future supply that may boost the price of crude oil worldwide. (DailyFX)

Prices of natural gas dropped further on Friday amidst increasing open interest and volume, which is supportive of the continuation of the decline in the very near term. Against that, a potential test of the October low at $4.75 per MMBtu seems to have started to emerge on the horizon. (FXStreet)

Source: FXStreet, DailyFX

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