Forex Today: Investors’ focus shifts to PMIs
|The strong presence of the risk-off sentiment lent extra legs to the US Dollar and prompted a marked correction in the risk-linked galaxy on Tuesday, as market participants quickly digested the BoJ event and got ready for the publication of advanced PMIs on Thursday as well as the BoC interest rate decision.
Here is what you need to know on Wednesday, January 24:
Further strength in the greenback in combination with higher yields across the curve and the intense risk aversion pushed the USD Index (DXY) to new yearly highs well north of 103.00. Next on tap in the US docket will be the preliminary Manufacturing and Services PMIs for the month of January.
It continued to rain around EUR/USD, which this time extended its downward bias to the 1.0820 region, or six-week lows. Moving forward, flash Manufacturing and Services PMIs in Germany and the Euroland will grab all the looks on Wednesday.
The selling pressure saw GBP/USD flirt with four-day lows near around 1.2650 on the back of the robust recovery in the greenback. Across the Channel, all the attention is expected to be on the release of January’s advanced Manufacturing and Services PMIs.
USD/JPY rapidly reversed a sudden pullback to the 147.00 zone and managed to return to levels well past the 148.00 hurdle as markets seem to have ignored a hawkish (ish) tilt from BoJ’s Ueda. On Wednesday, December Balance of Trade figures takes centre stage in the Japanese calendar.
AUD/USD navigated a volatile session, ending around Monday’s closing levels despite the firmer tone of the greenback and the mixed bias in the commodity complex. In Oz, Westpac will release its Leading Index for the month of December.
An inconclusive session left USD/CAD hovering around the 1.3470 region ahead of the key BoC interest rate decision on Wednesday. Consensus expects the central bank to keep the steady hand for the fourth meeting in a row.
Prices of WTI maintained its gradual yearly upside, although Tuesday saw the commodity recede slightly from Monday’s tops north of the $75.00 mark per barrel.
Despite extra gains in the greenback and increasing US yields, both Gold and its cousin Silver edged higher on Tuesday.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.