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.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD holds near 1.1100, looks to post small weekly gains

EUR/USD holds near 1.1100, looks to post small weekly gains

EUR/USD trades near 1.1100 in the American session on Friday. Although the risk-averse market atmosphere caps the pair's upside, dovish comments from Fed officials and the disappointing US jobs report help it hold its ground.

EUR/USD News
GBP/USD retreats to 1.3150 area after post-NFP spike

GBP/USD retreats to 1.3150 area after post-NFP spike

GBP/USD turns south and declines to 1.3150 area after spiking to 1.3240 in the early American session. The negative shift seen in risk mood following the US labor market data for August helps the US Dollar stay resilient against its peers and weighs on the pair.

GBP/USD News
Gold pulls away from near record highs, holds above $2,500

Gold pulls away from near record highs, holds above $2,500

Gold came within a touching distance of a new all-time high near $2,530 as US Treasury bond yields turned south on disappointing US jobs data. The US Dollar's resilience amid a souring risk mood, however, caused XAU/USD to erase its daily gains.

Gold News
Crypto today: Bitcoin, Ethereum, XRP tests key support, TRON network non-stablecoin activity hits new highs

Crypto today: Bitcoin, Ethereum, XRP tests key support, TRON network non-stablecoin activity hits new highs

Bitcoin, Ethereum, and XRP hover around key support levels after registering a steep correction earlier this week. TRON network’s stablecoin activity hit new highs following the release of SunPump.

Read more
Nonfarm Payrolls expected to show modest hiring rebound in August after July’s tepid report

Nonfarm Payrolls expected to show modest hiring rebound in August after July’s tepid report

The Nonfarm Payrolls report is forecast to show that the US economy added 160,000 jobs in August, after creating 114,000 in July. The Unemployment Rate is likely to dip to 4.2% in the same period from July’s 4.3% reading. 

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Forex MAJORS

Cryptocurrencies

Signatures