Forex Today: Dollar eases as investors gear for central banks’ decisions

Valeria Bednarik FXStreet

What you need to know on Tuesday, February 1:

The greenback edged lower against most major rivals, as speculative interest completely digested the US Federal Reserve’s aggressive tightening pat and as attention shifts to other central banks and US employment figures.

The Reserve Bank of Australia will announce its monetary policy decision early on Tuesday, with market participants anticipating the end of the pandemic-related QE and a possible announcement of sooner-than-planned rate hikes amid mounting inflationary pressures.

Later in the week, the European Central Bank and the Bank of England will have monetary policy decisions. Finally, on Friday, the US will publish the January Nonfarm Payrolls report.

Stocks staged a nice comeback, with Wall Street holding on to substantial gains heading into the daily close, adding pressure on the American currency. US government bond yields, in the meantime, ticked lower with that on the 10-year Treasury note settling at around 1.77%.

The EUR/USD pair trades in the 1.1230 region, while GBP/USD stands at 1.3460. Commodity-linked currencies posted intraday gains, with AUD/USD now trading at around 0.7070 and the USD/CAD pair just below the 1.2700 figure. Safe-haven currencies also advanced vs their American rival.

Spot gold struggles to overcome the $1,800 threshold, holing nearby. Crude oil prices are marginally higher, helped by Wall Street’s strength, with WTI trading at $88.12 a barrel.

British Prime Minister Boris Johnson still risk his premiership after a report by senior civil servant Sue Gray, uncovered multiple parties, some of which the PM attended, and a failure of leadership in his government in the early stages of coronavirus lockdowns. According to the report, gatherings were "difficult to justify."

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.