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Forex Today: DXY stabilizes in Asia, a light session ahead

Dhwani Mehta FXStreet

An eventless Asian session, with USD dynamics diving the markets, as the US dollar staged a comeback against its main competitors, as markets shift their attention from the US government shutdown fears to the Fed rate hike bets while Treasury yields extend their bullish momentum. The USD/JPY pair bounced-back towards 111 handle, up +0.10% on the day while the Antipodeans traded mixed in a tight range, unable to benefit from higher Asian stocks and oil prices.

Main topics in Asia

Fed's Williams - Faster growth & inflation could force Fed to hike rates rapidly

While talking to USA Today, San Francisco Federal Reserve President John Williams said the Fed could hike rates more rapidly than anticipated on faster growth and inflation.

German SPD backs coalition talks - RTRS

Reuters reports the weekend’s update from the German political environment, citing that Germany’s Social Democrats (SPD) voted on Sunday to begin formal coalition talks with Chancellor Angela Merkel’s conservatives.

Senate cancels vote on stopgap spending bill previously scheduled for 1 a.m. on Monday - Reuters

Senate to vote on stopgap bill noon EST Monday.

US government to remain shut Monday - Senator Cornyn

The No. 2 Republican Senator John Cornyn expects US government to remain shut Monday as lawmakers struggle to break the impasse, says Fox News channel.

Japan's fiscal target pushed back to the fiscal year 2027 - Reuters

Japan pushed back its projections for achieving a primary budget surplus by two years to the 2027 fiscal year, says Reuters.

Key Focus ahead

We have a data-light calendar to kick-off a busy week ahead that will be dominated by key central banking events. The Euroland has no data to report while the Eurogroup meeting will go on throughout the day. During mid-Europe, the German Bundesbank (Buba) will publish its monthly economic report, which is likely to have virtually no impact on the EUR markets.

The NA session also remains eventless, except for the Canadian wholesales sales release, as the US traders gear up for the housing and advance GDP data slated for release in the week ahead.

EUR/USD: US government shut down, ECB, where now from here?

EUR/USD was trapped despite a positive run in the European session on the back of firm data that rose the inflation prospects and end of QE speculation, (ahead of this week's ECB), which subsequently were underpinning yields pushing the 10-year German yield towards 0.60%.

GBP/USD - 10Y US-UK yield spread at a 10-month high, correction on the cards?

The GBP/USD turned lower from the high of 1.3945 and fell to 1.3839 on Friday on the back of a disappointing UK retail sales release.

The week ahead and key events- Nomura

Analysts at Nomura offered their outlook for the week ahead.

This Is Where I'm Buying EURUSD & GBPUSD This Week

We are looking for a pullback before buying with a close focus being paid to the 21-day exponential moving average (blue line) and the support/value zone between 1.2090 to 1.1950.

GMT	Event	Actual	Consensus	Previous
Sunday, Jan 21
21:00	KRW Producer Price Index Growth (YoY)	2.3%		3.1%
21:00	KRW Producer Price Index Growth	0.1%		-0.1%
Monday, Jan 22
24h	EUR Eurogroup meeting
05:30	EUR Consumer Spending Volume			1.7%
05:30	EUR Consumer Confidence Adj			25
09:00	EUR Current Account (YoY)			€-0.624B
n/a	EUR German Buba Monthly Report
10:00	EUR Unemployment Rate		5.92%	6.00%
13:30	USD Chicago Fed National Activity Index		0.44	0.15
13:30	EUR Current Account Balance EUR			€-65B
13:30	CAD Wholesale Sales (MoM)		1.0%	1.5%
14:00	MXN Jobless Rate s.a			3.5%
14:00	MXN Jobless Rate			3.4%
15:00	COP Trade Balance			$-628M
16:30	USD 3-Month Bill Auction			1.43%
16:30	USD 6-Month Bill Auction			1.6%
19:00	ARS Trade Balance (MoM)			$-1.541M
Tuesday, Jan 23
24h	CHF World Economic Forum - Davos
04:00	JPY BoJ Interest Rate Decision			-0.1%
04:00	JPY BoJ Monetary Policy Statement
n/a	JPY BoJ outlook report
05:00	SGD Consumer Price Index (YoY)			0.6
06:00	JPY Machine Tool Orders (YoY)			46.9%
n/a	JPY BoJ Press Conference
07:00	TRY Consumer Confidence			65.1
08:30	HKD Consumer Price Index			1.6%
09:30	GBP Public Sector Net Borrowing		£4.539B	£8.118B
10:00	EUR ZEW Survey - Current Situation			89.3
10:00	EUR ZEW Survey - Economic Sentiment			17.4
10:00	EUR ZEW Survey - Economic Sentiment		30	29
n/a	EUR 9-Month Letras Auction			-0.414%
n/a	EUR 3-Month Letras Auction			-0.61%
11:00	BRL Mid-month Inflation			0.35%
13:00	HUF MNB Interest Rate Decision			0.9%
13:00	RUB Industrial Output			-3.6%
13:55	USD Redbook index (YoY)			2.6%
13:55	USD Redbook index (MoM)			-0.3%
15:00	USD Richmond Fed Manufacturing Index			20
15:00	EUR Consumer Confidence		0.7	0.5
15:35	GBP CBI Industrial Trends Survey - Orders (MoM)			17
16:30	USD 4-Week Bill Auction			1.295%
18:00	USD 2-Year Note Auction			1.765%
23:50	JPY Adjusted Merchandise Trade Balance		¥261.7B	¥364.1B
23:50	JPY Merchandise Trade Balance Total		¥443.9B	¥113.4B
23:50	JPY Exports (YoY)		11.1%	16.2%
23:50	JPY Imports (YoY)		22.1%	17.2%
Wednesday, Jan 24
24h	RON Unification day
24h	CHF World Economic Forum - Davos
00:30	JPY Nikkei Manufacturing PMI		53.8	54.0
05:00	JPY Leading Economic Index		107.7	108.6
05:00	JPY Coincident Index		117.1	118.1
07:00	DKK Consumer Confidence			6.5
07:00	EUR Producer Price Index (YoY)			3.6%
07:00	EUR Import Prices (YoY)			8.4%
07:00	EUR Export Prices (YoY)			5%
07:00	EUR Consumer Confidence			24
07:45	EUR Business Climate			112
08:00	EUR Markit PMI Composite			59.6
08:00	EUR Markit Services PMI			59.1
08:50	EUR Markit Manufacturing PMI			58.8
08:55	EUR Markit PMI Composite			58.9
08:55	EUR Markit Services PMI			55.8
08:55	EUR Markit Manufacturing PMI			63.3
09:00	EUR Markit Services PMI		56.3	56.6
09:00	EUR Markit PMI Composite		58.3	58.1
09:30	GBP Claimant Count Rate			2.3%
09:30	GBP Claimant Count Change			5.9K
09:30	GBP Average Earnings excluding Bonus (3Mo/Yr)		2.5%	2.3%
09:30	GBP Average Earnings including Bonus (3Mo/Yr)		2.3%	2.5%
09:30	GBP ILO Unemployment Rate (3M)		4.3%	4.3%
11:30	TRY Capacity Utilization			79%
11:30	TRY Manufacturing Confidence			103.3
12:00	USD MBA Mortgage Applications			4.1%
14:00	USD Housing Price Index (MoM)		0.3%	0.5%
14:00	MXN 1st half-month Core Inflation			0.43%
14:00	MXN 1st half-month Inflation			0.44%
14:45	USD Markit Manufacturing PMI		55.8	55.1
14:45	USD Markit PMI Composite			54.1
14:45	USD Markit Services PMI		53.0	53.7
15:00	USD Existing Home Sales (MoM)		5.69M	5.81M
15:00	USD Existing Home Sales Change (MoM)		-2.1%	5.6%
15:30	USD EIA Crude Oil Stocks change			-6.861M
18:00	USD 5-Year Note Auction			2.245%
21:45	NZD Consumer Price Index (QoQ)			0.5%
21:45	NZD Consumer Price Index (YoY)			1.9%
23:50	JPY Foreign bond investment			¥953.5B
23:50	JPY Foreign investment in Japan stocks			¥498.7B
Thursday, Jan 25
00:00	NZD ANZ Activity Outlook			15.6%
24h	EUR EcoFin Meeting
24h	CHF World Economic Forum - Davos
07:00	EUR Gfk Consumer Confidence Survey			10.8
07:00	EUR Unemployment Survey			16.38%
07:00	NOK Labour Force Survey			4%
08:00	EUR Industrial Production (YoY)			4.4%
08:30	SEK Unemployment Rate			5.8%
08:30	SEK Producer Price Index (MoM)			1.5%
08:30	SEK Producer Price Index (YoY)			2.7%
09:00	EUR IFO - Business Climate			117.2
09:00	EUR IFO - Current Assessment			125.4
09:00	EUR IFO - Expectations			109.5
09:00	EUR Trade Balance non-EU			€4.6B
09:00	EUR Industrial Sales s.a. (MoM)			1.1%
09:00	EUR Industrial Sales n.s.a. (YoY)			6%
09:00	EUR Industrial Orders s.a (MoM)			1.9%
09:00	EUR Industrial Orders n.s.a (YoY)			12.5%
09:00	NOK Norges Bank Interest Rate Decision			0.5%
09:30	ZAR Producer Price Index (MoM)			0.5%
09:30	ZAR Producer Price Index (YoY)			5.1%
n/a	EUR 10-y Bond Auction			1.83%
n/a	EUR 10-y Bond Auction			0.79%
12:45	EUR ECB Interest Rate Decision			0%
12:45	EUR ECB Deposit Rate Decision			-0.4%
13:00	EUR Gross Domestic Product (QoQ)			0.3%
13:00	RUB Central Bank Reserves $			$437.9B
13:00	RUB Unemployment Rate			5.1%
13:30	USD Continuing Jobless Claims			1.952M
13:30	USD Initial Jobless Claims			220K
13:30	USD Wholesale Inventories		0.2%	0.8%
13:30	EUR ECB Monetary policy statement and press conference
13:30	CAD Retail Sales (MoM)		-0.1%	1.5%
13:30	CAD Retail Sales ex Autos (MoM)		0.0%	0.8%
14:00	MXN Trade Balance, $			$0.399B
14:00	MXN Trade Balance s/a, $			$0.091B
14:00	MXN Retail Sales (MoM)			1%
14:00	MXN Retail Sales (YoY)			-0.1%
14:00	EUR Leading Indicator			0.1
15:00	USD New Home Sales (MoM)		0.707M	0.733M
15:00	USD New Home Sales Change (MoM)		0.3%	17.5%
15:30	USD EIA Natural Gas Storage change			-183B
16:00	USD Kansas Fed manufacturing activity			21
18:00	USD 7-Year Note Auction			2.37%
20:00	COP Interest rate			4.75%
21:00	KRW Consumer Sentiment Index			111
23:30	JPY Tokyo Consumer Price Index (YoY)		0.7%	1.0%
23:30	JPY Tokyo CPI ex Fresh Food (YoY)		0.8%	0.8%
23:30	JPY Tokyo CPI ex Food, Energy (YoY)		0.3%	0.4%
23:30	JPY National Consumer Price Index (YoY)		0.3%	0.6%
23:30	JPY National CPI Ex Food, Energy (YoY)		0.3%	0.3%
23:30	JPY National CPI Ex-Fresh Food (YoY)		0.8%	0.9%
23:50	JPY BoJ Monetary Policy Meeting Minutes
Friday, Jan 26
24h	INR Republic Day
24h	CHF World Economic Forum - Davos
24h	AUD Australia Day
07:00	TRY Economic confidence index			95
07:00	EUR Industrial Confidence			18
07:45	EUR Consumer Confidence			105
08:00	EUR Private loans (YoY)			2.8%
08:00	EUR M3 Money Supply (3m)			5%
08:00	EUR M3 Money Supply (YoY)			4.9%
08:30	SEK Retail Sales (MoM)			0.9%
08:30	SEK Retail Sales (YoY)			3.8%
08:30	SEK Trade Balance (MoM)			-3B
09:30	GBP Gross Domestic Product (YoY)		1.5%	1.7%
09:30	GBP Gross Domestic Product (QoQ)		0.4%	0.4%
11:30	INR FX Reserves, USD			$413.83B
12:30	BRL Current Account			$-2.388B
13:00	RUB Producer Price Index (YoY)			8%
13:00	RUB Producer Price Index (MoM)			0.9%
13:30	USD Gross Domestic Product Price Index		2.3%	2.1%
13:30	USD Gross Domestic Product Annualized		3.0%	3.2%
13:30	USD Durable Goods Orders		0.8%	1.3%
13:30	USD Durable Goods Orders ex Transportation		0.2%	-0.1%
13:30	CAD Bank of Canada Consumer Price Index Core (YoY)		1.5%	1.3%
13:30	CAD Bank of Canada Consumer Price Index Core (MoM)		-0.6%	-0.1%
13:30	CAD Consumer Price Index (YoY)		2.1%	2.1%
13:30	CAD Consumer Price Index (MoM)			0.3%
18:00	USD Baker Hughes US Oil Rig Count			747
19:30	USD CFTC USD NC net positions			$122.5K
19:30	USD CFTC Oil NC net positions			707.8K
19:30	USD CFTC Gold NC net positions			$211.7K
19:30	GBP CFTC GBP NC net positions			£26.2K
19:30	JPY CFTC JPY NC net positions			¥-119.4K
19:30	EUR CFTC EUR NC net positions			€139.5K
19:30	AUD CFTC AUD NC net positions			$10.1K
23:00	KRW Industrial Output (YoY)			-1.6%
23:00	KRW Service Sector Output			2.5%
23:00	KRW Industrial Output Growth			0.2%

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD recedes to daily lows near 1.1850

EUR/USD keeps its bearish momentum well in place, slipping back to the area of 1.1850 to hit daily lows on Monday. The pair’s continuation of the leg lower comes amid decent gains in the US Dollar in a context of scarce volatility and thin trade conditions due to the inactivity in the US markets.

GBP/USD resumes the downtrend, back to the low-1.3600s

GBP/USD rapidly leaves behind Friday’s decent advance, refocusing on the downside and retreating to the 1.3630 region at the beginning of the week. In the meantime, the British Pound is expected to remain under the microscope ahead of the release of the key UK labour market report on Tuesday.

Gold looks inconclusive around $5,000

Gold partially fades Friday’s strong recovery, orbiting around the key $5,000 region per troy ounce in a context of humble gains in the Greenback on Monday. Additing to the vacillating mood, trade conditions remain thin amid the observance of the Presidents Day holiday in the US.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.