Forex Today: Fears could escalate at the weekly opening

FXStreet Team FXStreet

What you need to know on Monday, February 1:

Investors attention was diverted away from the FX board, amid turmoil in equities. The American dollar benefited from a dismal market mood but traded within familiar levels against its European rivals. Commodity-linked currencies and the JPY were the most affected by risk-aversion.

Gamestop shares soared amid retail investors’ actions gathered on social media looking for a short squeeze. The stock collapsed on Thursday as different brokers put restrictions in place on options trading, taking new positions and hiked margin levels. The frenzy grew as restricting trading borders illegality. Silver also fell under individual investors’ radar. The situation is far from over, and turmoil will likely extend into the upcoming days.

Wall Street finished the week with sharp losses after reaching fresh January lows. US Treasury yields, however, ticked higher ahead of the close, posting modest gains on the back of generally encouraging US data.

Vaccine-related news added to the dismal mood. The one-shoot from Johnson & Johnson has proven 66% effective in phase three trials, while Pfizer’s CEO said that "there is a high possibility that future variants will elude vaccines." Despite delayed delivery, vaccines are rolling out and hopes are that immunity will boost growth in the second half of this year.

On a positive note, the number of new coronavirus contagions keeps decreasing globally after peaking at 845K early on January to roughly 500K reported on Saturday. Still, tough restrictive measures remain in place, particularly in Europe, as several countries extended lockdowns or curfews throughout February.

Israel, the United Arab Emirates and the UK are the countries that have vaccinated the highest percentage of their population. The UK leading immunization may take a turn to the worst, as on Friday, the EU imposed export restrictions on vaccines after accusing the British- AstraZeneca of favoring its home market, in detriment of its contracts with the EU

Australia announced a five-day lockdown in the Pert area amid a new coronavirus case in a hotel worker, those set to quarantine arrivals. Authorities fear it could be one of the contagious strains coming from the UK or South Africa.

Gold and Oil gave up on Friday, weighed by equities. The bright metal settled at $ 1,847.50 a troy ounce, while WTI finished at $52.10 a barrel.

Bitcoin Price Analysis: BTC gets rejected near $39,000, correction to $32,000 likely

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FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

GBP/USD remains offered; bears target 1.3600

GBP/USD now leaves behind part of its recent recovery and revisits the low 1.3600s at the beginning of the week. Indeed, Cable trades with a mild downward bias amid decent gains in the Greenback as investors remain wary of upcoming US data releases and the Jackson Hole event.

EUR/USD remains sidelined above 1.1650

EUR/USD trades on the defensive following the closing bell on Wall Street on Monday, hovering around the 1.1660 region and adding to Friday’s small decline. The pair’s pullback comes in response to an acceptable rebound in the US Dollar in a context of generalised caution ahead of key US data releases and Chair Warsh’s speech in Jackson Hole.

Gold poised to extend its bullish run

Gold surrenders part of its initial advance, although it keeps its bullish pace well and sound above the $4,600 mark per troy ounce on Monday. The precious metal’s move higher comes despite slight gains in the US Dollar and a modest pullback in US Treasury yields across the curve.

XRP surged 72%, but is the rally really about XRP?

Ripple (XRP) surged more than 72% in less than a week, its strongest rally since July 2025, as cryptocurrency prices broadly broke out. But the move has a problem: it may have little to do with XRP itself. The token's near-term rally appears to have been driven largely by a broader liquidity shift after the US Treasury expanded long-end bond buybacks, pulling yields lower and lifting risk assets.

Convulsion in credit markets

The United States government just posted a $432.3 billion deficit for July, the largest monthly shortfall since March of 2021. That single burst of red ink pushed the yeartodate deficit to $1.8 trillion, with two months still remaining in fiscal 2026. At this pace, Washington will soon wax nostalgic for the “good old days” when annual deficits were only $2 trillion.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.