Daily Forex Market Report 30-Jan-2023: Volatility expected in the forex market as traders gear up for a week of interest rate announcements

There is a feeling of uncertainty and volatility in the forex market today as traders gear up for a week of interest rate announcements that will lay bare the central banks’ monetary policies across the US, UK and EU.

Cable has consolidated below the 1.24 mark after trading sideways on Sunday and heading 0.2% lower this morning while the US Dollar Index (DXY) managed to add around 0.13%.

In the wider time frame, DXY remains definitively bearish having lost over 3% since the intra-month high, a trend that is unlikely to change if, as is highly likely, the Federal Reserve implements a 25 bps rate hike on Wednesday.

Hell, the Fed might even announce a pause in rate hikes altogether to complement the States’ northern neighbour Canada’s surprise decision last week.

As for the Bank of England, consensus points to a bulkier 50 bps hike come Wednesday, which should prove a bullish catalyst for the GBP/USD pair.

GBP/USD struggled to break above December 2022 highs – Source: capital.com

EUR/USD barely budged in the Sunday session, a trend that filtered through to this morning, with the pair losing a handful of pips to 1.086.

Eurozone economic sentiment gauges scheduled for release today are expected to show slight improvements across the industrial and services sectors.

After the wild mood swings observed earlier this month, EUR/GBP has consolidated at 87.67p after barely registering any price action in the past two trading sessions.

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