Forex Today: Coronavirus seems less scary, Brexit tensions rise, BOC high on the agenda

Yohay Elam FXStreet

Here is what you need to know on Wednesday, January 22:

The coronavirus continues spreading and remains in the spotlight. The report of the first case of the respiratory disease in the US triggered a risk-off atmosphere but China managed to soothe tensions. At a press conference, authorities in the second-largest economy shed light on the situation, saying they are taking measures. USD/JPY and Asian stocks are on the rise.

Brexit: The Telegraph is reporting that the EU will propose the UK worse conditions than it previously offered Canada and Japan. GBP/USD has shrugged off the report and the pound remains bid after Tuesday's release of upbeat wage figures.

The Canadian dollar is set to move later in the day. Consumer prices' figures are forecast to show healthy inflation. It is shortly followed by the Bank of Canada's rate decision. The BOC will likely leave rates unchanged but Governor Stephen Poloz and his colleagues will likely acknowledge the improvement in the global mood. See BOC Preview: Rewards of economic patience.

The Australian dollar remains on the back foot after Westpac Consumer Sentiment dropped by 1.8% and ahead of the all-important jobs report.

EUR/USD: The European Central Bank is also on course to leave rates unchanged in its decision on Thursday and may also provide a more upbeat assessment of the inflation and growth outlooks. The ZEW Economic Sentiment data for January beat expectations. In the meantime, EUR/USD has been struggling to hold onto 1.11. See ECB Preview: Glass half green or a Lagarde drag on EUR/USD? Three scenarios

Cryptocurrencies are stable, with Bitcoin trading above $8,700.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

GBP/USD off highs, back to 1.3620

GBP/USD remains slightly on the defensive at the end of the week, receding to the low 1.3600s after hitting fresh tops past 1.3670 earlier in the day. Cable’s correction comes after two daily gains in a row and amid a tepid advance in the Greenback, while poor UK data also accompany the downside.

EUR/USD treads water below 1.1700

EUR/USD now trades with modest losses around 1.1670 following another unsuccessful atempt to advance past 1.1700 the figure in a convincing fashion. The pair’s decline follows a maginal rebound in the US Dollar as market participants continue to assess recent US data as well as developments from the US bond market.

Gold trims gains, recedes to the sub-$4,600 area

Gold rapidly leaves behind Thursday’s inconclusive price action and advances markedly on Friday, briefly surpassing the $4,600 mark per troy ounce to hit three-month peaks. Meanwhile, the precious metal’s solid performance comes despite marginal gains in the buck coupled with another day of rising US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP bulls accelerate rally amid rising ETF inflows

The cryptocurrency market remains bullish on Friday, led by Bitcoin’s surge above $77,000. Altcoins, including Ethereum and Ripple, mirror BTC’s positive outlook, trading near $2,400 and $1.35, respectively.

Week ahead – Fed’s Jackson Hole and Nvidia earnings to dictate markets

Kevin Warsh to make his Jackson Hole debut amid confusing messaging. But a major hawkish surprise unlikely after bond market intervention. Nvidia earnings to also determine market direction as stock rally cools.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.