|

Forex Today: Markets remain quiet to begin 2026

Here is what you need to know on Friday, January 2:

Financial markets remain in holiday mood as the first trading day of the new year gets underway. The economic calendar will not offer any high-tier data releases on Friday and trading volumes could remain thin heading into the weekend.

US Dollar Price This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.24%0.18%0.27%0.37%0.10%1.23%0.56%
EUR-0.24%-0.06%0.04%0.14%-0.14%0.99%0.33%
GBP-0.18%0.06%0.25%0.20%-0.08%1.05%0.39%
JPY-0.27%-0.04%-0.25%0.12%-0.16%0.95%0.31%
CAD-0.37%-0.14%-0.20%-0.12%-0.23%0.86%0.19%
AUD-0.10%0.14%0.08%0.16%0.23%1.13%0.47%
NZD-1.23%-0.99%-1.05%-0.95%-0.86%-1.13%-0.66%
CHF-0.56%-0.33%-0.39%-0.31%-0.19%-0.47%0.66%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Following a modest recovery to end 2025, the US Dollar (USD) Index holds its ground in the European morning on Friday and fluctuates in a tight range above 98.00. Meanwhile, US stock index futures rise between 0.3% and 0.7% following the decline seen earlier in the week. On Monday, the Institute for Supply Management (ISM) will publish the Manufacturing Purchasing Managers' Index (PMI) data for December.

Gold registered large losses ahead of the New Year break but managed to regain its traction on Friday. At the time of press, XAU/USD was trading near $4,380, rising more than 1% on a daily basis.

Similarly, XAG/USD stages a decisive rebound toward $74 and gains more than 3% on the day. Still, Silver is down nearly 7% for the week and remains on track to snap a five-week winning streak.

EUR/USD holds steady at around 1.1750 after edging lower in the first half of the week. Sentix Investors Confidence data for January will be featured in the European economic calendar later in the session.

After dropping to its lowest level in over a week and testing 1.3400 on the last day of 2025, GBP/USD reversed its direction and erased a large portion of its weekly losses. The pair stays relatively calm early Friday and trades above 1.3450.

Following Monday's decline, USD/JPY closed in positive territory for two consecutive days. The pair continues to stretch higher and trades near 157.00 early Friday.

Gold FAQs

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

More from Eren Sengezer
Share:

Editor's Picks

GBP/USD: Gains remains capped below 1.3400

GBP/USD trades in positive territory, with the upside capped below 1.3400 in the European session on Friday. The US Dollar extends weakness following a weaker-than-expected US Nonfarm Payrolls report, which fades Fed rate hike expectations.

EUR/USD stays firm around 1.1450  amid weaker US Dollar

EUR/USD remains on the front foot at around 1.1450 in European trading on Friday. The pair seems poised to register gains for the first time in three weeks as receding US Federal Reserve rate hike bets keep the US Dollar under pressure.

Gold stays on track to snap four-week losing streak amid fading Fed hike bets, weak USD

Gold retains its bullish bias for the third straight day and traders near a one-and-a-half-week high during the first half of the European session. The precious metal seems poised to register gains for the first time in five weeks, with bulls still awaiting a move beyond the $4,200 mark before positioning for an extension of this week's recovery from the lowest level since November 2025.

Hyperliquid gears up for a higher leg as bullish momentum resurfaces

Hyperliquid (HYPE) extends gains above $66 maintaining a long-term upward trend supported by its rising 50-day EMA around $60. Retail demand for HYPE rises in the near term, with Open Interest up around 5% over 24 hours as funding rates hold above zero, while institutional demand remains muted so far this week.

Week ahead – ISM services PMI and Fed Minutes to shake Fed hike bets
The US dollar is finishing the week on the back foot against most of its major counterparts this week, losing the most ground against the kiwi, the franc and the pound. Despite the pullback, investors remained adamant in their view that the Fed may have to press the rate hike button before the turn of the year.
Kevin Warsh offers no policy clues: Why markets still got their answer

Financial markets came to Sintra looking for clues about the Federal Reserve's (Fed) next move. They largely left with confirmation that Fed Chair Kevin Warsh intends to make those clues much harder to find.