Forex Today: Inflation in the eye of the storm

Valeria Bednarik FXStreet

What you need to take care of on Wednesday, January 18:

The US Dollar retained its intrinsic weakness on Tuesday, ending the day with losses against all of its major rivals. The Euro was the worst performer, while the British Pound was the best against the Greenback.

On the one hand, the EUR/USD pair fell to 1.0771 amid market talks suggesting European Central Bank (ECB) officials are considering slowing the pace of tightening. Rumors suggest President Christine Lagarde & co will opt for a 50 basis points (bps) rate hike in February, reducing hikes to 25 bps starting in March.

On the other hand, GBP/USD flirted with 1.2300 after the United Kingdom’s employment-related figures hinted at a relatively tight labour market. The Bank of England would then have room to push the benchmark rate higher and maintain it there for longer. The UK will publish December inflation figures on Wednesday.

The Canadian Consumer Price Index (CPI), rose at an annual pace of 6.3% in December, while the monthly CPI fell by 0.6%. USD/CAD trades around 1.3376.

The AUD/USD pair finished Tuesday near the 0.7000 level, retaining its positive momentum despite the poor tone of global equities.

The USD/JPY pair trades around 128.40 ahead of the Bank of Japan monetary policy decision.

Spot gold trades little changed at around $1,907, while crude oil prices were up, with WTI hovering around $81 per barrel.

Wednesday will bring an update on EU inflation, the US Producer Price Index and the UK CPI.

Like this article? Help us with some feedback by answering this survey:

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD struggles below 1.1800 ahead of US data, Fedspeak

EUR/USD remains trapped in a tight range below 1.1800 in the European session on Tuesday. The pair struggles amid a modest US Dollar strength and an improvement in risk sentiment, even as US tariff uncertainty lingers. The focus now remains on the US data and Fedspeak.

GBP/USD stays defensive below 1.3500 as USD firms up

GBP/USD stays on the back foot below 1.3500 in the European trading hours on Tuesday. The pair declines as the US Dollar rebounds from losses recorded over the previous two sessions. Traders will focus on the US weekly ADP Employment Change and Consumer Confidence data due later in the day, along with speeches from Federal Reserve officials.

Gold holds pullback below $5,200 amid USD uptick

Gold holds moderate losses below $5,200 in European trading on Tuesday, though it lacks follow-through selling. Following the previous day's knee-jerk fall in reaction to US President Donald Trump's new global tariffs and the subsequent bounce, the US Dollar attracts fresh buyers ahead of mid-tier data and Fedspeak.

Dogecoin, Shiba Inu, and Pepe extend losses on bearish signals

Meme coins are facing renewed selling pressure amid fading broad risk-on sentiment so far this week, with Dogecoin, Shiba Inu, and Pepe extending their losses after recent corrections.

Supreme Court nixes tariffs, Trump teases 15% global tariff

On February 20th, the Supreme Court ruled that Trump’s global tariffs under IEEPA authority were unconstitutional, effectively nullifying the framework. However, the relief was short-lived. Within hours, Trump floated a 15% blanket tariff under an alternative legal authority.

Dogecoin, Shiba Inu, and Pepe extend losses on bearish signals

Meme coins are facing renewed selling pressure amid fading broad risk-on sentiment so far this week, with Dogecoin, Shiba Inu, and Pepe extending their losses after recent corrections.