Markets Report - 10 January 2023

A daily breakdown of the markets for the 10th January 2023, provided to you by Sterlex.

🇪🇺💶The EUR/GBP cross regains positive traction following an early dip to sub-0.8800 levels and moves away from over a two-week low touched the previous day. The shared currency, on the other hand, benefits from hawkish European Central Bank (ECB) rhetoric. In fact, ECB Governing Council member Francois Villeroy de Galhau said last Thursday that it would be desirable to reach the right terminal rate by next summer. Furthermore, ECB expects wage growth to be very strong over the next few quarters. European Central Bank (ECB) Governing Council member Isabel Schnabel said on Tuesday that restrictive monetary policy stance will benefit society over the medium to long run by restoring price stability. The cross sticks to its modest intraday gains through the early European session and is currently placed near the top end of its daily range, around the 0.8825-0.8835 region.

🇬🇧💷The British Pound, is undermined by a bleak outlook for the UK economy, which has been fueling expectations that the Bank of England (BoE) is nearing the end of the current rate-hiking cycle. Without any doubt, the better risk environment is helping the GBP. Sterling has been performing slightly better. The British Pound's relative underperformance comes amid a bleak outlook for the UK economy, which has been fueling expectations that the Bank of England (BoE) is nearing the end of the current rate-hiking cycle. This, in turn, supports prospects for a further intraday fall for the GBP/USD pair amid absent relevant macro releases.

🇺🇸 🏦Economists at Credit Suisse expect DXY to find a floor at what looks to be better support at 102.99/101.99. Apart the USD uptick could also be attributed to some repositioning trade ahead of Fed Chair Jerome Powell's speech, due later during the early North American session. A goodish pickup in the US Treasury bond yields, along with a softer risk tone, help revive demand for the safe-haven greenback. The US Dollar Index touched its lowest level in seven months at 102.94. A combination of factors assists the US Dollar to stage a modest recovery from a seven-month low set on Monday, which, in turn, is seen exerting some downward pressure on the GBP/USD pair.