Forex Today: Risk-off led the way

FXStreet Team FXStreet

Here is what you need to know on Tuesday, January 22nd:

A virus outbreak in China that can be spread between humans spurred risk aversion. China canceled the Lunar New Year´s celebrations to prevent a worldwide outbreak of the coronavirus, although there are reports that the virus has already crossed borders.
The EUR/USD pair flirted with 1.1120 on an upbeat ZEW Survey, but closed the day unchanged just below 1.1100, as the greenback recovered with Wall Street’s late slump.
GBP/USD peaked at 1.3081 after a generally better-than-anticipated UK employment report, ending the day around 1.3050 amid the dollar’s recovery in the final trading session of the day.
JPY appreciated amid risk-aversion and a mildly optimistic Kuroda.
The Australian dollar remains among the weakest currencies across the board, weighed by the negative sentiment.
European and American indexes closed in the red. Wall Street plummeted on rumors the coronavirus reached the US.
Commodities seesawed between gains and losses but finished the day with modest losses and without relevant changes.
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EUR/USD remains bid, focus stays on 1.1900

EUR/USD has broken its two-day run of losses and is ticking modestly higher on Thursday, hovering around the 1.1880 area as the US Dollar struggles to find clear direction. Weekly Initial Jobless Claims rose more than expected, taking a bit of shine off the Greenback, but markets are largely in wait-and-see mode ahead of Friday’s US CPI release.

GBP/USD sticks to the bid bias, still below 1.3700

GBP/USD is trading with decent gains around 1.3650 on Thursday. Indeed, Cable is attempting to shake off the weakness seen earlier in the week amid another choppy session for the Greenback, while a run of disappointing UK data has so far failed to derail the pair’s tentative recovery.

Gold recedes slightly, trades below $5,100

Gold remains stuck in choppy trade on Thursday, deflating marginally just below the $5,100 mark per troy ounce as the US Dollar drifts without a clear trend. Softer US Treasury yields across the curve are offering some support, but with markets treading carefully ahead of Friday’s US CPI release, conviction remains limited and price action continues to look hesitant.