Forecasting the upcoming week: US Dollar holds firm as shutdown ends, NFP, CPI ahead
The US Dollar (USD) saw little movement this week after markets assessed the United States (US) President Donald Trump's nomination of Kevin Warsh, a former member of the Federal Reserve (Fed) Board of Governors, as the next Fed Chair, and the partial US government shutdown that pushed employment and inflation data to next week. The shutdown was ultimately resolved on Wednesday when President Trump signed a funding bill.
The US Dollar Index (DXY) is trading near the 97.60 price zone after hitting two-week highs earlier on Friday. Next week, the US ADP Employment Change four-week average will be released on Tuesday, Nonfarm Payrolls on Wednesday and Initial Jobless Claims on Thursday.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.33% | -0.55% | 0.05% | -0.27% | -1.03% | -0.92% | -0.36% | |
| EUR | 0.33% | -0.23% | 0.39% | 0.06% | -0.70% | -0.59% | -0.04% | |
| GBP | 0.55% | 0.23% | 0.62% | 0.29% | -0.48% | -0.37% | 0.19% | |
| JPY | -0.05% | -0.39% | -0.62% | -0.31% | -1.08% | -0.97% | -0.41% | |
| CAD | 0.27% | -0.06% | -0.29% | 0.31% | -0.77% | -0.66% | -0.10% | |
| AUD | 1.03% | 0.70% | 0.48% | 1.08% | 0.77% | 0.11% | 0.67% | |
| NZD | 0.92% | 0.59% | 0.37% | 0.97% | 0.66% | -0.11% | 0.56% | |
| CHF | 0.36% | 0.04% | -0.19% | 0.41% | 0.10% | -0.67% | -0.56% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The EUR/USD pair is trading near the 1.1820 price zone, up by over 0.30% in the day after the European Central Bank (ECB) announced its monetary policy decision earlier in the week. The Sentix Investor Confidence for February will be released on Monday, and the Eurozone Employment Change on Friday.
GBP/USD is trading near the 1.3610 price region, trimming part of the weekly losses after a dovish hold in the interest rate decision by the Bank of England (BoE). The January BRC Like-For-Like Retail Sales will be released on Monday, and Industrial and Manufacturing Production will be released on Thursday.
USD/JPY is trading near the 157.10 level, climbing to near a two-week high. Japanese General Elections will be on Sunday alongside the release of December Labor Cash Earnings and Current Account NSA.
USD/CAD is trading near the 1.3650 price region, trimming half of its weekly gains. Canada will not have relevant data releases next week.
Gold is trading near $4,960 after the US shutdown was resolved, with geopolitical tensions on standby, the yellow metal struggles to attract buyers.
Anticipating economic perspectives: Voices on the horizon
Sunday 8:
- BoE’s Governor Bailey.
Monday 9:
- ECB’s Lane.
- ECB’s Nagel.
- ECB President Lagarde.
Tuesday 10:
- Fed’s Hammack.
- Fed’s Logan.
Wednesday 11:
- ECB’s Cipollone.
- Fed’s Bowman.
- ECB’s Schnabel.
- Fed’s Hammack.
Thursday 12:
- ECB’s Cipollone.
- ECB’s Lane.
- ECB’s Nagel.
Friday 13:
- Fed’s Logan.
- Fed’s Miran.
- ECB’s De Guindos.
- BoE’s Pill.
Saturday 14:
- ECB’s President Lagarde.
Central banks' meetings and upcoming data releases to shape monetary policies
Tuesday 10:
- US December Retail Sales.
Wednesday 11:
- China January Consumer Price Index (CPI).
- US January Nonfarm Payrolls.
Thursday 12:
- UK flash Gross Domestic Product (GDP) (Q4).
Friday 13:
- RBNZ Inflation Expectations (Q1).
- Swiss January CPI.
- Eurozone flash GDP (Q4).
- US January CPI.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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Author
Agustin Wazne
FXStreet
Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.
