Here is what you need to know on Friday, January 24:
Coronavirus: While the number of cases continues rising and China canceled several New Year's celebrations, the market mood has calmed. One of the reasons for the relative ease comes from the World Health Organization, which refrained from declaring a global emergency. USD/JPY is off the lows and gold prices have stabilized.
EUR/USD is stabilizing after suffering from the European Central Bank's lack of enthusiasm about the recent upbeat economic figures. President Christine Lagarde announced the launch of a strategic review, set to conclude by year-end. The focus now shifts to Markit's forward-looking Purchasing Managers' Indexes for January.
See Eurozone PMIs preview: Upbeat expectations seem justified, opening the door for EUR/USD gains
Italy: Regional elections in Emiglia Romana over the weekend are seen as a test for the stability of the government, which is already vulnerable after Luigi di Maio stepped down from leading the Five-Star Movement.
PMIs are also eyed in the UK. After last week's inflation, retail sales, and Gross Domestic Product missed expectations, this week's jobs report and other statistics were positive. The fresh post-election surveys could be the tipping point for the Bank of England's decision next week. GBP/USD has managed to hold its ground despite USD strength.
See UK PMIs preview: Cementing the BOE rate cut? Five GBP/USD scenarios
Canadian retail sales figures for November are forecast to show a bounce after falling in November. The loonie was hit earlier this week by the Bank of Canada, which expressed concern about recent economic developments and opened the door to cutting rates.
The New Zealand dollar remains bid after the quarterly Consumer Price Index beat expectations with 0.5%. The improved market mood also supports NZD/USD.
Oil prices found their feet after oil inventories data surprised with a smaller-than-expected drawdown. The coronavirus scare continues capping crude prices.
Cryptocurrencies are on the back foot, with Bitcoin trading below $8,400.
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EUR/USD extends slide toward 1.1000 on broad USD strength
EUR/USD stays under bearish pressure and trades at a fresh multi-week low below 1.1050 on Thursday. The upbeat ISM Services PMI data for September boosts the US Dollar, while rising bets for an ECB rate cut in October undermine the Euro.
GBP/USD tests multi-week lows near 1.3100 after Bailey's dovish remarks
GBP/USD loses more than 1% and trades at around 1.3100, pressured by dovish comments from BoE Governor Andrew Bailey, who said that the central bank could become 'more activist' on rate cuts if inflation eases. On the other hand, the USD benefits from strong PMI data.
Gold struggles to gain traction, trades below $2,650
Gold oscillates in a tight range below $2,650 after bets fade that the Fed will continue slashing interest rates aggressively. Although XAU/USD finds support from increasing geopolitical risks, the broad USD strength doesn't allow the pair to stage a rebound.
Bitcoin stabilizes at crucial support after major crash
Bitcoin (BTC) trades slightly down on Thursday, after declining over 7% this week, and holds near a crucial support level; a sustained close below this threshold could signal further declines ahead.
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The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
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