(Updates)

• Shares of gold miners down, tracking a fall in prices of bullion [GOL/]

• Spot gold down 0.9% to $2,666.36/ounce, after dropping as low as 1% earlier in the session

• Gold prices dipped as the U.S. dollar soared to an over two-year high after a robust jobs report last week cemented expectations the Federal Reserve will proceed with caution with cutting interest rates this year

• Top miner Barrick Gold down 1.4%

• U.S.-listed shares of South African miners AngloGold Ashanti and Sibanye Stillwater each down 1%

• Shares of Canadian miners Agnico Eagle Mines and Kinross Gold down 2.4% and 3.3%, respectively

• Mali's government initiates provisional order to seize gold stocks at Barrick Gold's Loulo-Gounkoto site; company warns it may have to suspend operations at the complex

(Reporting by Pooja Menon in Bengaluru)

Synopsis:

BofA sees continued downside pressure on the CHF in 2025, driven by rate differentials and weak inflation data, but questions the SNB's capacity to effectively weaken the currency at the lower bound of policy rates.

Key Points:

1. Carry-Driven Weakness:

   • Swiss inflation data reinforces the case for further SNB easing as global markets question broader easing trends.
   • Carry remains the primary driver for CHF depreciation, with Swiss rate dynamics pointing to further downside risks.

2. Challenges for the SNB:

   • With the policy rate nearing its terminal level, the SNB faces challenges in meaningfully weakening the CHF to stimulate inflation.
   • Traditional FX interventions may lose effectiveness, requiring alternative technical market measures.

3. USD/CHF Outlook:

   • The pair remains positioned for upside as global rate differentials favor the USD, providing a "clean" directional bias in the near term.

Conclusion:

BofA highlights CHF’s vulnerability to carry-related dynamics but emphasizes the need for innovative SNB strategies to achieve inflation targets as conventional policy tools become constrained.

Jan 13 (Reuters) - With EUR/USD falling to a new 26-month low on Monday, and a test of parity and possibly below looking likely, counter-trend investors see no need to be brave just yet.

U.S. Treasury yields extended their uptrends which drove broad based dollar buying which helped depress EUR/USD through 1.02.

The dollar's yield advantage over the euro increased as German-U.S. 2-year spreads widened while terminal rate spreads for the Fed and ECB widened to -198bps.

The EUR/USD drop helps to intensify technical signals which highlight downside risks.

The pair pierced the 61.8% Fibonacci retracement of the 0.9528-1.1276 rally, and a monthly inverted hammer candle in place for January.

Those signals reinforce bearish signs from EUR/USD trading below the falling 5- and 21-day moving averages, as well as signs from falling daily and monthly relative strength indices which are not oversold and imply downward momentum remains.

Investors are now focused on U.S. December PPI, CPI and retail sales data this week, which will indicate if inflation could be returning and also the health of the American consumer.

Hotter than expected data could see investors price out expectations for a lower Fed Funds rate, and possibly begin pricing in a rate hike.

The dollar would likely get another boost if so, which could deflate EUR/USD through 1.00 and towards the 76.4% Fibo of 0.9528-1.1276 which sits near 0.9940.
eurusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Synopsis:

Despite EUR/USD starting 2025 under pressure due to economic and policy divergence, Credit Agricole argues that parallels to the energy-driven lows of 2022 are unwarranted.

Key Points:

1. Economic and Policy Divergence:

   • European economic concerns, coupled with potential US trade tariffs, have underscored cyclical and policy divergence.
   • A dovish ECB contrasts with a more neutral Fed, weighing on EUR/USD.

2. Energy Concerns vs. 2022:

   • Rising European gas prices, driven by reduced Russian supplies and falling storage levels, mirror past fears but lack the same disruptive potential.
   • Sovereign credit risks tied to energy markets are less likely to resurface compared to three years ago.

3. Relative Valuation Support:

   • EUR/USD appears undervalued based on relative commodity terms of trade between the Eurozone and the US, providing a buffer against further downside.

Conclusion:

Credit Agricole believes comparisons to 2022’s EUR/USD lows are overblown, citing diminished systemic energy risks and improved relative valuation metrics as stabilizing factors.

Synopsis:

Goldman Sachs advises against further selling of GBP, citing potential for recovery in risk appetite, fiscal risk moderation, and delayed positive growth data as supportive factors.

Key Points:

1. Risk Appetite Recovery:

   • Recent GBP weakness is partly driven by broader risk-off sentiment in FX markets.
   • A rebound in global risk appetite could provide support to GBP.

2. Fiscal Risk Premium:

   • Macro conditions and evolving net supply dynamics suggest eventual compression of fiscal risk premium in gilts.
   • This should reduce perceived fiscal risks for the currency.

3. Growth Data Lag:

   • While UK growth momentum has recently softened, upcoming data reflecting increased government spending and investment could surprise positively.
   • These improvements are not yet fully visible in the current market sentiment.

Conclusion:

Goldman Sachs recommends caution on further GBP downside in the near term, citing supportive factors that could stabilize or improve the currency's outlook.

• AUD/USD hit 0.61625 in Asia, sellers emerged, 0.6131 traded in Europe

• NY opened near 0.6145, traded close to flat in early NY action

• US yield , US$ gains & AUD/JPY, stock drops weighed on AUD/USD

• Pair traded to a fresh 4-1/2-year low before bouncing towards flat

• Australia yield , commodity gains helped the bounce

• Techs are bearish; RSIs falling, monthly inverted hammer in place for Jan.

• US December PPI & CPI are major data risks for later this week
audusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• U.S.-listed shares of gold miners down premarket, tracking a fall in prices of bullion [GOL/]

• Spot gold falls 0.4% to $2,678.21/ounce, off almost one-month highs reached on Dec. 10

• Gold prices down as strong U.S. jobs data reinforced Federal Reserve's cautious stance on interest rate cuts and boosted dollar, though underlying safe-haven demand amid uncertainty around President-elect Donald Trump's policies curbed losses

• Top miner Barrick Gold down 1.9%

• U.S.-listed shares of South African miners AngloGold Ashanti dips ~1% and Sibanye Stillwater falls 2.8%

• U.S.-listed shares of Canadian miner Agnico Eagle Mines

down 1%

• Mali's government initiates provisional order to seize gold stocks at Barrick Gold's Loulo-Gounkoto site; company warns it may have to suspend operations at the complex

(Reporting by Pooja Menon in Bengaluru)

• Uncertainty encourages repatriation, choppy in Asia

• Stocks tumble as traders cast doubt on 2025 rate cut

• In times of uncertainty, funds usually flow into the safe-haven yen

• USD/JPY has dropped from 157.96 to 157.17, on Monday, EBS data shows

• Recall it peaked at 158.88, on Friday, the highest level since July

• USD/JPY's technical bias remains on the upside, however

• 30 and 60-day correlations between USD/JPY and EUR/JPY remains above +0.50

Daily Chart:

(Martin Miller is a Reuters market analyst. The views expressed are his own)

• Multiple reasons why EUR/USD will likely drop to parity

• Spot looks set to drop through 1.0196 Fibo, as 14-week momentum is negative

• 1.0196 Fibo is a 61.8% retrace of the 0.9528 to 1.1276 EBS rise

• A break below 1.0196 Fibo would unmask the 1.0000 psychological level

• Our offer has been lowered to 1.0350. EUR/USD trader

• There is interim resistance at the January 8 1.0357 high

Weekly Chart:

(Martin Miller is a Reuters market analyst. The views expressed are his own)

• There are many FX option barriers and triggers still in play from 1.0200

• Option barriers and triggers are typically found at 50 pip increments

• Barrier options tend to pay a fixed amount if level hit before expiry

• Triggers are usually attached to vanilla options and knock them in, or out

• FX Market should expect increased defence at big trigger/barriers levels

• FX volatility can often increase amid hedging/short covering flows if broken

• Plenty of USD risk events this week to keep EUR/USD downside vulnerable

• Huge vanilla FX option expiries at 1.0200, 1.0250 and 1.0300-10 on Monday
EUR=EBS

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• Cable drops to fresh 14-month low of 1.2124 (Friday's low was 1.2194)

• USD continues to benefit from Friday's strong US jobs data

• Strong US jobs growth raises doubts about further Fed rate cuts

• Gilt yields rose sharply last week, to the detriment of GBP

• On Saturday, Reeves said she will act to ensure UK fiscal rules are met

• GBP/USD bids may emerge around 1.2100 (1.2096 was Nov 2023 low)

GBPUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• FX option strikes expire at 10-am New York/15.00 GMT - Monday January 13

• EUR/USD: 1.0200 (3.9BLN), 1.0250 (2.5BLN), 1.0300-10 (7.5BLN)

• 1.0325 (525M), 1.0375 (3.4BLN)

• GBP/USD: 1.2375 (1.2BLN)

• AUD/USD: 0.6150 (250M)

• USD/CAD: 1.4410 (540M)

• USD/JPY: 157.00 (260M), 157.50 (203M), 158.00 (930M)

• EUR/JPY: 159.50 (300M), 161.70 (366M)

• FX options wrap - Poised for more USD gains and volatility risk (Richard Pace is a Reuters market analyst. The views expressed are his own)

• AUD/USD slides to 0.6132, lowest since Apr 2020, as USD reigns

• Negative technical bias enforced by bearish closing on Fri

• Bollinger downtrend channel engaged; ceiling currently 0.6180

• Risk-off spreads in Asia as US NFP overshadows China trade data

• Strong beat on China Dec exports fails to lift mood

• Markets already priced in upbeat numbers due to front-loading
AUD:

(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

• Trades off 0.1% in Asia with a 1.2181 fresh trend low and a 1.2209 high

• UK PM Starmer to outline plan to make Britain a world leader in AI

• Large UK companies plan to cut hiring at the fastest pace since the pandemic

• Another bearish survey, this time from Deloitte, as the budget reverberates

• There are no significant UK data or BoE events - USD/risk to lead sterling

• Charts - daily momentum studies fall, 21-day Bollinger bands expand

• 5, 10 & 21-DMAs slide - weeklies remain bearish - a strong negative setup

• Targets a test of the 1.2038 Oct 2023 low, then the 1.1805 2023 low in March

• Friday's 1.2322 high then the 1.2486 well-tested 21 DMA are first resistance

• Bulls need a close above 1.2486 21-DMA to get excited
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• Shares of St Barbara fall as much as 11.6% to A$0.248, their biggest intraday pct loss since Dec. 24, 2024

• Gold miner says gold sales for December quarter totalled 11,712 ounces vs 14,958 ounces compared to the previous year

• Expects production for the year to hit the lower end of the initial 65,000 to 75,000 ounces guidance

• Stock last year gained 7.1%

(Reporting by Kumar Tanishk and Nikita Maria Jino in Bengaluru)

Jan 13 (Reuters) - The Australian dollar has been in a clear downtrend since hitting a 19-month high of 0.6943 in October but proximity to a long-term support level and an over-extended 11.3% drop may slow the decline.

The AUD's fall to a near five-year low of 0.6139 on Friday brings key support at 0.6099, the 76.4% Fibonacci retracement of its post-COVID rally from 0.5510 to 0.8007 into play.

The Relative Strength Index, a key momentum indicator that measures the magnitude of recent price changes to analyse overbought or oversold conditions, is showing divergence as the AUD/USD price makes a new low but the RSI moves higher - a warning sign of an oversold market.

While these technical factors may slow the AUD's drop, fundamental factors point to an eventual extension of the decline.

The robust U.S. labour market, sticky inflation and rising inflation expectations have spurred doubts about further Federal Reserve interest rate cuts. Concerns over the inflationary effects of President-elect Donald Trump's policies, rising Treasury yields and their knock-on effect on "priced-to-perfection" stock markets have also pummelled the AUD.

Growing expectations of a 25-basis-point February rate cut by the Reserve Bank of Australia and an elusive Chinese economic recovery are adding to the AUD's woes.

The currency faces further risks from U.S. inflation, Australia employment, China trade and monthly activity data and the Jan 20 U.S. Presidential inauguration in the week ahead.

A clear loss of 0.6099 would open a ratchet lower to 0.5980-0.6000, the April 2020 low and psychological support.
AUD:


AUD:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai)

(Headline to read 1.0250 instead of 1.02650 strikes)

• Off 0.05% early after closing down 0.5% with the U.S. dollar up 0.5%

• Yield spreads widened after strong US jobs data sparked US inflation fears

• 10yr bund closed +4bp to 2.576% and 10yr Treasury yields rose 8bp to 4.763%

• Chances of a viable French budget deal with the Socialists make progress

• Charts - daily momentum studies ease, 21-day Bollinger bands slide

• 5, 10 & 21-DMAs slip, weekly moving averages fall - a negative trending bias

• Friday's 1.0312 top, then last week's 1.04537 high are initial resistance

• 1.0212 low on Friday then 1.0195 0.618% of the 2022/2023 rise first supports

• 1.0200 3.887 BLN and 1.0250 2.507 BLN are the close strikes for Jan 13th
Andy


(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• Steady after closing down 0.2% with the USD up 0.4% after strong US jobs

• Turbulence in offshore markets triggered Japanese repatriation flows

• Japanese Coming of Age Day holiday today, Yen likely led by the USD & risk

• Charts - 5 & 21-day moving averages climb, as momentum studies crest

• Tenkan & Kijun lines edge higher as the daily cloud slips - neutral setup

• 158.88 NY high and 159.51 falling upper 21 Day Bolli band first resistance

• 156.98 21-day moving average and Dec 20 155.97 range base initial support

• Tenkan line has been a magnet for the last two weeks - 157.56 today
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• AUD/USD likely headed for 0.6100 strong support as USD strengthens broadly

• Closed 0.8% lower in NYK after hitting a near 5-year low of 0.6139

• Strong U.S. jobs growth raises doubts about further Fed rate cuts, weighs

• U.S. yields jump to multi-year highs; talk of 10-year yield hitting 5%

• U.S. inflation, Australia employment, China data, Fed comments key this week

• Growing likelihood of RBA 25 bps February rate cut also undermines AUD

• Strong support at 0.6099, 76.4% of 0.5510-0.8007 post-COVID rally

• Break opens 0.5980, Apr 2020 low; resistance 0.6170-80, 0.6100, 0.6220-25

• Friday range 0.6139-0.6206
AUD:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

Jan 10 (Reuters) - The dollar index jumped to a fresh two-year high after a strong U.S. jobs report for December and a rise in consumer inflation expectations suggested the Federal Reserve will remain cautious about cutting rates.

The U.S. economy added 256k jobs in December -- versus the consensus forecast of 160,000 -- and the unemployment rate unexpectedly fell to 4.1%, compared to expectations of 4.2%. The January University of Michigan consumer sentiment index largely matched expectations though 1-year inflation and 5-year inflation expectations both jumped to 3.3%.

There is no evidence the U.S. economy is overheating again despite the blowout December jobs report, Chicago Fed president Austan Goolsbee said, adding he still expects it will be appropriate to lower interest rates further.

Focus now turns to U.S. inflation readings for next week including consumer price on Wednesday.

Surging crude oil also supported the greenback with prices up 3% due on Russian supply worries linked to U.S. sanctions.

Sterling tumbled to its weakest level since November 2023 after the U.S. data, taking the brunt of the currency sell off as yields rose. Cable has moved into oversold territory though bounces are expected to be shallow ahead of Wednesday’s U.K. Dec. CPI and Nov. GDP on Thursday.

EUR/USD slumped to a 26-month low, with sentiment remaining bearish due to European growth concerns. Inflation data within the euro zone and comments by ECB Chief Economist Philip Lane next week could be the next catalysts for selling.

USD/JPY posted a multi-month high of 158.89 before slumping U.S. equities and position-squaring reversed the tide. Tokyo is on holiday Monday. Yen buyers are expected ahead of Jan. 14 comments by BOJ Deputy Governor Himino Ryozo, a hawk who may back views expressed in Friday's article about upgrading price forecasts due to wage gains and yen weakness.

Treasury yields were up 4 to 12 basis points as the curve flattened. The 2s-10s curve lost 4 basis points to +37.8bp.

The S&P 500 slid 1.3% with most sectors trading lower.

Gold was up 0.6% amid haven-related buying while China demand lifted copper 0.8% to a near one-month high.

Heading toward the close: EUR/USD -0.56%, USD/JPY +0.12%, GBP/USD -0.78%, AUD/USD -0.79%, DXY +0.47%, EUR/JPY -0.71%, GBP/JPY -0.94%, AUD/JPY -0.95%.(Editing by Burton Frierson Reporting by Robert Fullem)

• USD/JPY slightly lower after a 157.24-158.89 EBS range after US jobs data

• Bearish tilt is due to US share drop, weak crosses and positon-squaring

• Yen buying anticipated ahead of midweek comments by BOJ hawk Dep Gov Himino

• Bets of Jan. BOJ hike building after article discussing wages, import costs.

• Follows comments from econ min. Ryosei Akazawa on BoJ policy coordination

• Support is 156.80-84 21-DMA and Dec. 20 close below nearby conversion line

• Post-Fed low of 156.02 and the 156.09 weekly cloud top is key support zone.

• Resist. is near 158.89 week's high, 159.20 and 159.67 upper Bollinger

• Tokyo is on holiday Monday
yen

(Robert Fullem is a Reuters market analyst. The views expressed are his own.)

• NY opened near 0.6190 after 0.6206 trade overnight, drop extended in NY

• Dec. jobs report indicated job market is healthy; yields
rallied

• US$ rallied, USD/CNH hit 7.3639; stocks , copper fell sharply

• AUD/USD broke the 2022 yearly low, hit 0.6139, level seen back in April 2020

• Jan. U of Michigan inflation outlooks helped keep yields, US$ buoyant

• AUD/JPY fell near 96.80 on risk-off; helped weigh down AUD/USD

• Techs are bearish; RSIs falling, monthly inverted hammer in place for Jan.

• Hold below the 10- & 21-DMAs reinforce the bearish signals

• US Dec. PPI & CPI will be key data risks from the Us next week
audusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Synopsis:

ANZ forecasts weaker Q4 inflation, prompting a 25bp RBA rate cut in February. They maintain expectations for only two cuts in 2025, reflecting a cautious approach by the central bank.

Key Points:

1. Inflation Outlook:

   • Trimmed mean inflation is expected at 0.5% q/q in Q4, the lowest since Q2 2021.
   • Annual trimmed mean inflation is forecast at 3.2%, below the RBA’s projection of 3.4%.
   • Six-month annualized inflation is predicted to fall to 2.6%, within the target band.
   • Services inflation is estimated to drop to 4.1%, the lowest since Q3 2022.

2. RBA February Decision:

   • ANZ expects a 25bp rate cut at the February meeting due to softer inflation and wage growth, alongside resilient labor market conditions.
   • However, a hold remains possible if the RBA prioritizes risks from labor market tightness and a potential rebound in household spending.

3. 2025 Policy Path:

   • ANZ maintains expectations of two 25bp cuts in February and August 2025, bringing the cash rate to 3.85%.
   • The RBA is likely to adopt a cautious approach in easing policy, given ongoing concerns about inflation risks.

Conclusion:

ANZ sees a February rate cut as likely given weaker-than-expected Q4 inflation and subdued wage growth, though a cautious RBA approach could limit the depth of the easing cycle.

• GBP$ -0.77% at 1.2210, in NY afternoon trade; NY range 1.2323-1.2194

• Pair hit hard after U.S. payroll surprised higher lifting UST yields

• Sterling sinks with UK Gilts after above-forecast payroll data

• Fed cut odds drift lower on signs of persistent U.S. economic strength

• Next key data will be Jan 15, U.S. and UK CPI releases

• GBP dip outpaces other CCYs as gilts rise in tandem, stoking UK fiscal fears

• Res 1.2257 falling 10-HMA, 1.2294 lwr 30-d Bolli (fmr supt), 1.2426 10-DMA

• Supt 1.2194 Friday post-data low, 1.2093 Nov 30 2023 monthly low, 1.2039 Oct 6 2023 wkly low

GBP Chart:

(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)