Dollar keeps surging while European markets sink

Chris Beauchamp IG

European markets are under heavy pressure again today, but in the US the dollar rally is still going strong, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

FTSE 100 edges down but rest of Europe drops sharply

The rise in yields continues to pressure European stocks, but the FTSE 100’s losses pale in comparison to continental Europe. Here, the yield trade combines with political worries about the German election, plus deep concern that incoming president Trump will impose tariffs on European companies. The CAC40 is heading back to the lows of August but the Dax is losing ground rapidly too.

Dollar pushes to five-month high

Today’s CPI reading has supported the dollar and given it fresh impetus to move higher, while a drop to parity for the euro against the dollar is being openly talked about once more. Trump’s election has only increased the appeal of all things US, and while stocks have taken something of a breather this week, there seems no stopping the dollar.

Author

Chris Beauchamp

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.