Forex Today: Dollar retains the weak stance ahead of BOE, ECB

Valeria Bednarik FXStreet

What you need to know on Thursday, February 3:

The American dollar kept falling on Wednesday to reach fresh weekly lows against its high-yielding rivals. The EUR/USD pair reached 1.1329 as the EU annual Consumer Price Index jumped to 5.1% in January, largely surpassing the 4.4% expected and above the 5% previous. The reading came one day ahead of the European Central Bank monetary policy announcement, putting pressure on the central bank to respond with a tighter monetary policy.

Government bond yields held near the lower end of their weekly range.

GBP/USD heads into the Asian opening, trading near a daily high of 1.3587, as Wall Street recovered from an early knee-jerk and closed in the green. Stocks eased after the release of the US ADP survey, which showed that the private sector lost 301K positions in January, much worse than anticipated and fueling concerns about the economic recovery in the country.

AUD/USD trades in the 0.7140 region, while USD/CAD is down to 1.2660, while safe-haven currencies also advanced against the dollar.

Gold posted a modest intraday advance and trades at $1,808 a troy ounce, while crude oil prices remained steady around Tuesday’s close. WTI settled at $88.10 a barrel.

US indexes managed to post gains after a soft start to the day. The DJIA added over 200 points and was the best performer.

On Thursday, the European Central Bank and the Bank of England will announce their decisions on monetary policy.

Crypto.com price slips despite offer to protect Australian users against hacks

Like this article? Help us with some feedback by answering this survey:

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 edges higher to near 1.1600 on US-Iran Strait of Hormuz deal

The EUR/USD pair trades in positive territory around 1.1590 during the early Asian session on Tuesday. A deal to reopen the Strait of Hormuz spurred a rally in riskier assets such as the Euro against the US Dollar. Traders await the US Federal Reserve interest rate decision later on Wednesday.

GBP/USD retreats from tops, back to 1.3420

GBP/USD keeps its advance past the 1.3400 yardstick at the beginning of the week. In the meantime, Cable continues to draw support from improved market sentiment following reports that the US and Iran have reached a framework agreement aimed at ending the conflict and reopening the Strait of Hormuz.

Gold posts modest gains as US‑Iran peace deal, fading Fed hike bets support bullion

Gold price trades with mild gains during the early Asian session on Tuesday. The precious metal extends the rally after the United States and Iran reached a comprehensive framework deal to end hostilities, easing inflation concerns.

Bank of Japan expected to raise interest rate to 1%, its highest since 1995

The Bank of Japan is expected to hike interest rates to 1% in its June meeting. Governor Kazuo Ueda will not precede the meeting due to health issues. USD/JPY retains its bullish bias despite easing demand for the US Dollar.

Strategy boosts BTC holdings with $100 million purchase as whales return to accumulation

Strategy expanded its Bitcoin holdings last week, purchasing 1,587 BTC for roughly $100 million, according to a filing submitted on Monday. The purchase increased Strategy's total holdings to 846,842 BTC, acquired at an average cost basis of $75,656 per Bitcoin.

4.2% headline, 0.2% core: Why the Fed's next hike may be targeting the wrong problem

May's CPI put headline inflation at 4.2% on the year, up from 3.8% in April and the hottest reading since April 2023, while core prices rose just 0.2% on the month, undershooting the 0.3% consensus and halving April's pace.