Forex Today: All eyes on US data dump - including Q4 GDP


Here is what you need to know on Thursday, January 26:

The US Dollar struggles to stay resilient against its rivals early Thursday with the US Dollar Index staying in negative territory below 102.00 following Wednesday's slide. The European economic docket will not feature any high-tier data releases and the risk perception is likely to drive the market action in the first half of the day. In the early American session, December Durable Goods Orders, weekly Initial Jobless Claims and December New Home Sales data from the US will be looked upon for fresh impetus. More importantly, the US Bureau of Economic Analysis will release its first estimate of the Gross Domestic Product (GDP) growth for the fourth quarter.

Market expectation points to an annualized economic expansion of 2.6% in the fourth quarter following the 3.2% growth recorded in the third quarter. 

US Gross Domestic Product Preview: Three reasons to expect a US Dollar-boosting outcome.

On Wednesday, the Bank of Canada (BOC) announced that it hiked its policy rate by 25 basis points to 4.5% as expected. In its policy statement, the BOC noted that it is likely to hold the rate at this level while assessing the impact of cumulative rate hikes. Commenting on the policy outlook, "this is a conditional pause, dependent on the economy developing broadly in line with forecasts." BOC Governor Tiff Macklem explained. "If we need to do more to get inflation to the 2% target, we will; if upside risks materialise we are prepared to raise rates further." After climbing to a multiday high of 1.3430 with the initial reaction, USD/CAD lost its traction and closed the day slightly below 1.3400. At the time of press, the pair was moving up and down in a narrow channel at around 1.3390.

The BOC's 'conditional pause' in policy tightening forced the benchmark 10-year US Treasury bond yield to stay below 3.5% and didn't allow the US Dollar to gather strength against its major rivals. Meanwhile, Wall Street's main indexes closed the day little changed after having opened deep in the red. In the European morning, US stock index futures trade modestly higher on the day.

EUR/USD benefited from the broad US Dollar weakness and climbed above 1.0900 before going into a consolidation phase early Thursday. It's worth noting that the European Central Bank's (ECB) quiet period starts today and policymakers are unlikely to deliver any comments on the policy outlook ahead of next week's meeting.

GBP/USD snapped a two-day losing streak on Wednesday. The pair was last seen trading modestly higher on the day a few pips above 1.2400.

USD/JPY came under modest bearish pressure and declined below 130.00. The pair continues to edge lower toward 129.00 early Thursday. During the Asian trading hours, the Bank of Japan's (BOJ) Summary of Opinions revealed that policymakers agreed that the BOJ must keep yields from rising across the curve while being mindful of bond market function.

Gold price took advantage of falling US T-bond yields last Wednesday and registered gains for the third straight day. XAU/USD continued to push higher in the Asian session and came within a touching distance of $1,950 before retreating slightly.

Following Tuesday's downward correction, Bitcoin gathered bullish momentum and rose toward $24,000 on Wednesday before erasing a portion of its daily gains in the late American session. As of writing, BTC/USD was trading flat slightly above $23,000. Ethereum rose nearly 4% on Wednesday and retraced the majority of Tuesday's decline. ETH/USD was last seen moving sideways at around $1,600.

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD retreats below 1.0850 after upbeat US PMI data

EUR/USD retreats below 1.0850 after upbeat US PMI data

EUR/USD lost its traction and declined below 1.0850 in the American session on Thursday. Upbeat PMI data from the US, combined with the mixed action seen in Wall Street's main indexes, helps the US Dollar gather strength and weighs on the pair.

EUR/USD News

GBP/USD falls toward 1.2700 as USD benefits from PMI data

GBP/USD falls toward 1.2700 as USD benefits from PMI data

GBP/USD came under modest bearish pressure and declined toward 1.2700 in the second half of the day on Thursday. The US Dollar (USD) benefits from the PMI data, which showed an ongoing expansion in the private sector at an accelerating pace, and weighs on the pair.

GBP/USD News

Gold extends slide below $2,350.00

Gold extends slide below $2,350.00

Gold stays on the back foot and trades at its lowest level in over a week below $2,350. The benchmark 10-year US Treasury bond yield rises more than 1% following the stronger-than-forecast PMI data from the US, forcing XAU/USD to stretch lower.

Gold News

As Ethereum spot ETF approval nears, these altcoins could explode

As Ethereum spot ETF approval nears, these altcoins could explode

It is not surprising that altcoins related to Bitcoin saw a major rally post-Bitcoin spot ETF approval. Likewise, tokens closely related to Ether could ride the ETF approval wave. Ethereum Classic, Pepe, Floki and other DeFi tokens could gain momentum as the ETH ETF approval deadline nears. 

Read more

US S&P Global PMIs Preview: Economic expansion set to persist in May

US S&P Global PMIs Preview: Economic expansion set to persist in May

On Thursday, S&P Global will issue its flash estimates of the United States (US) Purchasing Managers Indexes (PMIs), a monthly survey of business activity. The survey is separated into services and manufacturing output and aggregated into a single statistic, the Composite PMI.

Read more

Forex MAJORS

Cryptocurrencies

Signatures