|

Forex Today: Dollar dominates the sentiment on broad-based risk-off mood

The beginning of the new trading year continued to see the greenback on the positive foot. Moving forward, Asian markets should closely follow the Chinese calendar, where Caixin Services and Composite PMIs are due. In Japan, the final Manufacturing PMI tracked by Jibun Bank is due, while nothing is scheduled in Oz on Thursday.

Here is what you need to know on Thursday, January 4:

The US Dollar Index (DXY) climbed to the area of three-week tops around 102.70 on the back of the persevering selling bias in the risk-associated universe. In addition, US yields rose further to multi-week peaks across different maturities, reinforcing at the same time the constructive tone around the dollar.

US stocks probed the area of multi-day lows, extending the corrective move after hitting a new all-time high just below the 38000 yardstick when gauged by the reference Dow Jones.

Data released on Wednesday showed an improvement in the always relevant US ISM Manufacturing PMI to 47.4 in the last month of 2023, while the labour market gauge of JOLTs Job Openings missed estimates at 8.79M in November, showing further cooling of the US labour market prior to key releases of the ADP and weekly Initial Jobless Claims (Thursday) and the December Nonfarm Payrolls (Friday).

EUR/USD sank to the sub-1.0900 region for the first time since mid-December against the backdrop of the stronger greenback and generalized weakness in the risky assets.

GBP/USD was a kind of exception after revisiting the upper-1.2600 amidst decent gains and following three consecutive sessions of losses.

Another negative session for the Japanese yen saw USD/JPY climb to the 143.70 region on the back of the continuation of the upside momentum of US yields and a directionless patter in JGB 10-year yields.

AUD/USD remained well on the defensive and retreated for the fourth session in a row against the backdrop of further pressure surrounding the high-beta currencies and the generalized bearish session in the commodity complex.

Speaking about the commodity universe, the Canadian dollar lost ground for the fifth consecutive session, lifting USD/CAD to the 1.3370 zone, or two-week highs.

The intense move higher in the greenback and US yields weighed on gold and sponsored a drop to multi-day lows near $2030 per ounce. In the same line, silver prices added to the pessimistic start of the year and broke below the $23.00 mark per ounce to clinch a new two-week lows.

No news from the FOMC Minutes left the positive momentum in the US Dollar unchanged after the committee's belief that rates are nearing their peak cycle and projections indicating a lower rate by 2024 were already widely anticipated. Moreover, some participants expressed the view that it may be necessary to maintain the policy rate at its current level for a longer period than initially anticipated.

Author

Pablo Piovano

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

More from Pablo Piovano
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD struggles to extend advance above 1.1800

The EUR/USD pair posts a fresh weekly low near 1.1740 during the Asian trading session on Wednesday. The major currency pair is under pressure as the US Dollar edges higher despite Federal Open Market Committee minutes of the December policy meeting, released on Tuesday, showing that most policymakers stressed the need for further interest rate cuts.

GBP/USD trades flat above 1.3450 amid thin trading volume

The GBP/USD pair holds steady around 1.3465 during the early Asian trading hours on Wednesday. However, the Bank of England guided that monetary policy will remain on a gradual downward path, which might underpin the Cable against the US Dollar. Financial markets are expected to trade on thin volumes as traders prepare for the New Year holiday.

Gold attempts another run toward $4,400 on final day of 2025

Gold price makes another attempt toward $4,400 in Asian trading on Tuesday, keeping the recovery mode intact following Monday's over 4% correction. The bright metal seems to cheer upbeat Chinese NBS and RatingDog Manufacturing and Services PMI data for December. 

Top Crypto Gainers: Canton, Four, Plasma rally secures double-digit gains

Canton, Four, and Plasma are the top-performing crypto assets over the last 24 hours with double-digit gains. The extended recovery in Canton is gaining traction while Four and Plasma target a decisive close above the 200-period Exponential Moving Average on the 4-hour chart.

Economic outlook 2026-2027 in advanced countries: Solidity test

After a year marked by global economic resilience and ending on a note of optimism, 2026 looks promising and could be a year of solid economic performance. In our baseline scenario, we expect most of the supportive factors at work in 2025 to continue to play a role in 2026.

Crypto market outlook for 2026

Year 2025 was volatile, as crypto often is.  Among positive catalysts were favourable regulatory changes in the U.S., rise of Digital Asset Treasuries (DAT), adoption of AI and tokenization of Real-World-Assets (RWA).