Asia Summary and Highlights 29 Jan
Gold Rally Continues
Asia Session
The rally in previous metal continues, with Gold up almost another 3% and Silver another 2%. While the key player is weakness in the USD, it is hard to neglect significant speculative interest. The parabolic gains will not go forever and is posed for a sharp correction at some point. Yet, fundamental supportive factors are going to see Gold catching bids in dips. And understandably, Aussie is the big benefactor from soaring metal and soft USD. AUD/USD is trading 0.65% higher at 0.7086. NZD/USD is also trading 0.38% higher while USD/CAD slips 0.26%.
After the FOMC hold interest rate overnight, market participants are digesting the context in the Asia session. Gold continue to receive ruthless bids while both the U.S. Treasury and JGB yields are little changed. USD/JPY is trading 0.21% lower at 153.08. Else, EUR/USD is up 0.21% and GBP/USD is up 0.16%.
North American session
Ahead of the FOMC, after a subdued European morning, the Bank of Canada left rates unchanged as expected. The statement noted heightened uncertainty, which could be read as dovish, but USD/CAD initially extended losses below 1.3550.
Attention however quickly shifted to remarks by Treasury Secretary Bessent, who stated the US was absolutely not intervening in USD/JPY and setting the right fundamentals would be USD supportive. USD/JPY bounced to 153.70 from 152.90 and EUR/USD slipped to 1.1925 from 1.1970. USD/CAD corrected higher to 1.3580. GBP/USD and AUD/USD saw only a limited response while EUR/CHF could not sustain a brief move above .92.
The FOMC left rates unchanged as expected though with dovish dissents from Miran and Waller. The statement was lightly more positive on the economy and that view was supported by Powell, lifting the USD, but he balanced that by stating easing could be seen as the boost to prices from tariffs peaks. The USD ended slightly below pre-FOMC levels, with USD/JPY near 153.40 and EUR/USD near 1.1950. AUD/USD reached fresh highs at .7030 while USD/CAD returned to 1.3550.