Forex Today: It’s all about the dollar and the Fed

Valeria Bednarik FXStreet

What you need to know on Friday, January 28:

The market was all about the dollar and the Fed after the US central bank pretty much confirmed a rate hike coming in March, fueling speculation of at least four hikes this year. The greenback got additional support from upbeat growth figures, as Q4 GDP came in at 6.9%, much better than the 5.5% expected. Meanwhile, unemployment claims in the week ended January 14 met expectations by printing at 260K.

The American currency extended its post-Fed rally to reach a multi-month high vs the shared currency, as EUR/USD plunged to 1.1130. GBP/USD fell to 1.3354, a one-month low, with both pairs settling nearby.

Commodity-linked currencies also fell, with AUD/USD currently trading at around 0.7030 and USD/CAD at 1.2730. Gold prices collapsed, with the bright metal falling below $1,800 a troy ounce. Crude oil prices advanced to fresh multi-year highs but lost momentum ahead of the daily close and finished the day little changed, with WTI settling at $86.80 a barrel.

Wall Street started the day with a firm footing, posting substantial intraday gains. However, it changed course in the final hours of trading, with indexes falling into the red. US Treasury yields retreated from Wednesday’s peak, with the yield on the 10-year note down to 1.78%. The greenback held on to gains despite the changing direction in equities and yields.

Dogecoin price to break weekly high and tag $0.16

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 remains sidelined around 1.1600

EUR/USD clings to its decent gains on Monday and continues to move in a consolidative mood around the 1.1600 region. Improved risk appetite following the US-Iran agreement to reopen the Strait of Hormuz continues to weigh on the US Dollar, lending support to the risk complex. Looking ahead, investors are likely to remain on the sidelines ahead of Wednesday's FOMC meeting.

GBP/USD retreats from tops, back to 1.3420

GBP/USD keeps its advance past the 1.3400 yardstick at the beginning of the week. In the meantime, Cable continues to draw support from improved market sentiment following reports that the US and Iran have reached a framework agreement aimed at ending the conflict and reopening the Strait of Hormuz.

Gold stays firm, still below $4,400

Gold builds on its recent gains on Monday, climbing well north of the $4,300 mark per troy ounce. The yellow metal benefits from renewed selling pressure on the Greenback as investors reassess the implications of the US-Iran agreement to end hostilities and reopen the Strait of Hormuz. Market participants now turn their attention to Wednesday's FOMC gathering.