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

Yohay Elam FXStreet

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.

EUR/USD in 2020: Lean times soon to turn into flush times for euro dollar
GBP/USD in 2020: Pound may continue to fall on hard Brexit deadline
USD/JPY in 2020: A journey from trade fears to high-stakes election

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

EUR/USD looks to stabilize near 1.1600 as focus shifts to US data

EUR/USD is looking to stabilize near 1.1600 in the European session on Wednesday as traders breathe a sigh of relief before the top-tier US ADP jobs and ISM Services PMI data. A pause in the US Dollar uptrend helps the pair's recovery, but surging energy prices due to the Iran war will likely remain a drag.

GBP/USD stays weak near 1.3350 as USD preserves gains

GBP/USD stays in the red below 1.3350 in the European session on Wednesday. Escalating conflict in the Middle East keeps the "flight to safety" theme intact, supporting the US Dollar against the Pound Sterling. Traders will take more cues from the US ADP Employment and ISM Services Purchasing Managers Index reports, which are due later on Wednesday.

Gold sticks to intraday gains above $5,150; upside seems limited amid bullish USD

Gold preserves its modest intraday gains through the Asian session on Wednesday and currently trades just above the $5,150 level, up around 1.30% for the day. Investors remain concerned about a prolonged conflict in the Middle East and its impact on the global economy amid an already uncertain environment.

Bitcoin, Ethereum and Ripple struggle for direction as consolidation persists

Bitcoin, Ethereum and Ripple prices trade with a cautious tone at the time of writing on Wednesday as upside momentum continues to fade across the broader crypto market. BTC remains within a parallel channel, ETH struggles below key resistance, while XRP remains fragile within a descending channel. These top three cryptocurrencies by market capitalization continue to struggle to establish a directional bias amid the consolidation phase.

Asian stocks fall as South Korea’s KOSPI slumps over 10%

Asian equities drop on Middle East tensions; the MSCI Asia Pacific Index falls up to 4%. South Korea’s KOSPI fell 10.71% near 5,170, with the Korean Won weakened past 1,500 per dollar.

Solana Price Forecast: SOL consolidation near resistance as ETF inflows offer mild support

Solana price is facing slight rejection as it approaches the upper boundary of the consolidation range at around $88 on Wednesday. Institutional demand is strengthening as spot Exchange Traded Funds recorded two consecutive inflows so far this week.