Forex Today: Focus shifts to PMI surveys following choppy start to the week

Here is what you need to know on Tuesday, January 24:

The US Dollar is having a difficult time shaking off the bearish pressure early Tuesday and the US Dollar Index stays in negative territory below 102.00. On Monday, the benchmark 10-year US Treasury bond yield recovered above 3.5% and helped the US Dollar stay resilient against its rivals despite the risk-positive market environment. US stock index futures trade flat in the early European morning as investors await S&P Global Manufacturing and Services PMI surveys for the Euro area, Germany, the UK and the US. The Richmond Fed Manufacturing Index for January will also be featured in the US economic docket later in the day and a 2-year US Treasury note auction will take place at around 1800 GMT.

With the Fed staying in the blackout period, Wall Street's main indexes registered strong gains on Monday as market participants remain optimistic about a policy pivot. According to the CME Group FedWatch Tool, markets are pricing a 62% probability that the Fed will stay on hold after raising the policy rate by 25 basis points in February and March.

After rallying to a fresh multi-month high above 1.0900 during the Asian trading hours on Monday, EUR/USD erased its gains in the second half of the day and closed virtually unchanged. Early Tuesday, the pair is stretching higher toward 1.0900. Mixed comments from European Central Bank officials on the policy outlook seem to be limiting the Euro's potential gains for the time being. While speaking at a conference on Monday, "we have made it clear that ECB interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive, and stay at those levels for as long as necessary," ECB President Christine Lagarde said.

GBP/USD registered small losses on Monday as the Pound Sterling struggled to outperform the US Dollar amid political jitters in the UK. Early Tuesday, the pair clings to modest daily gains at around 1.2400.

The data from Australia showed earlier in the day that the S&P Global Manufacturing and Services PMIs both arrived slightly below in January's flash estimate. Additionally, National Australia Bank's Business Conditions Index declined to 12 in December from 20, missing the market expectation of 19 by a wide margin. Despite the uninspiring data releases, AUD/USD trades in positive territory near 0.7050 and stays within a touching distance of the multi-month high it set at 0.7064 earlier in the month. In the early Asian session on Wednesday, Consumer Price Index data for the fourth quarter will be watched closely by investors.

USD/JPY gained nearly 100 pips on Monday but seems to have lost its bullish momentum on Tuesday. The pair was last seen losing more than 0.5% on the day at 129.85.

Gold price struggled to gather bullish momentum on Monday amid recovering US T-bond yields and closed the day flat. With the US Dollar staying under modest selling pressure and US yields holding relatively steady early Tuesday, XAU/USD regained its traction and was last seen trading at its highest level since mid-April at $1,940.

Bitcoin posted small gains on Monday and continued to stretch higher early Tuesday. At the time of press, BTC/USD was up nearly 1% on the day at $23,100. Ethereum continues to fluctuate in a tight range slightly above $1,600 after having struggled to make a decisive move in either direction on Monday.