Forex Today: Fear grips markets as US kills top Iranian commander, ISM, FOMC awaited

Here is what you need to know on Friday, January 3:

The US killed Qassem Suleimani, a top Iranian commander, in Bahgdad's airport. Ali Khamenei, Iran's supreme leader, vowed "severe revenge."

Global markets are selling off, and oil prices spiked higher. WTI topped $63, USD/JPY hit 108, Gold leaped above $1,540, and the greenback is rising across the board.

North Korea continues threatening a strike amid its escalation with the US. Relations have soured in the past few months.

The US dollar had already been on the rise before the Mid-East news broke out. The greenback reversed its losses in late 2019. EUR/USD is well below 1.12, and GBP/USD is struggling around 1.31.

The ISM Manufacturing Purchasing Managers Index for December is the first top-tier release in 2020 and it serves as a hit toward next week's jobs report. It is expected to rise – but remain below 50, reflecting contraction.

See US ISM manufacturing PMI December Preview: Waiting for improvement from China trade

Late in the day, the Federal Reserve's meeting minutes from the December meeting may shed more light on the bank's latest rate cut and its decision to wait before the next moves.

See December FOMC minutes preview: Affirming neutral

Germany releases preliminary December inflation figures, a prelude to all-European statistics next week. 

Brexit: Labour, the opposition party, will table an amendment to the Withdrawal Bill that will try to prevent a no-trade-deal Brexit. The chances of passing are low as Prime Minister Boris Johnson's Conservatives command a majority. UK construction PMI is set to show a minor improvement in December. 

Cryptocurrencies are recovering after a substantial fall on Thursday, with Bitcoin trading above $7,000.


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