Published: 2023-12-20T18:52:30.000Z
Psychology for major markets 21 Dec

Senior Economist , North America
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USD remains softer as equities hold up.
EUR/USD – 1.10 looks likely to be toppy near term despite the attempts by the ECB to maintain a hawkish stance, but 1.09 level is likely to hold as long as equities remain firm.
USD/JPY – USD/JPY gained after the BoJ left policy and guidance unchanged at the December meeting. Yield spreads still don’t support the gains, however, and 145 likely to prove toppy.
EUR/GBP – EUR/GBP higher after weak UK CPI, support now seen at .86 though selling expected ahead of .87.
AUD/USD – AUD still has scope for gains if risk appetite continues to hold up, with the RBA less likely to turn dovish than the Fed or European central banks.
Equities – Fed speakers suggesting markets over-reacted to FOMC though downside risks to equities are modest without a change in the data tone or a sharp spike in UST yields.