Forex Today: Tariffs weigh on markets, pound recovers ahead of data, Bitcoin takes a breather

Yohay Elam FXStreet

Here is what you need to know on Wednesday, January 15:

Trade: The US will maintain most of the tariffs it has slapped on China at least until November – when the US elections are due. The market mood has worsened and the yen recovered on fears that Phase One of the trade deal – due to be signed today – will not be helpful enough to the global economy. Also, the administration is set to tighten pressure on Huawei, China's telecom giant.

US-EU trade: The European Commission's Phil Hogan continues trade talks in Washington after the first day of negotiations ended without a breakthrough.

GBP/USD has been recovering and recaptured at 1.30. The Bank of England's Michael Saunders – a hawk turned dove – will speak early in the day and may join the calls for cutting rates. The UK then releases inflation figures for December, with the headline Consumer Price Index expected to remain unchanged at 1.5%. See UK inflation: Cementing the rate cut or triggering a GBP/USD correction? Three scenarios

US data: The US Producer Price Index is due out today after CPI came out at 2.3% on the headline and on the core. See US inflation reinforces the Fed neutral policy. The administration is considering disallowing reporters in the lockup room to use computers for preparing their news stories, potentially delaying the publication.

Federal Reserve members Patrick Harker and Robert Kaplan – both voters in 2020 – will speak today and will likely reaffirm the bank's neutral stance.

US politics: Nancy Pelosi, Speaker of the House, will send the Articles of Impeachment to the Senate, setting the stage for a trial for President Donald Trump. The chances of ousting him are low. Democratic presidential hopefuls battled it out in another televised debate ahead of the Iowa caucuses. Joe Biden, former Vice President, remains the frontrunner.

Iran: While tensions with the US have eased, the European signatories of the nuclear deal are set to introduce new sanctions, trying to bring the Middle-Eastern nation back to compliance.

Cryptocurrencies have been retreating from the highs, with Bitcoin consolidating around $8,600, and Ethereum above $160. Dash stands out with a leap of over 30%.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

GBP/USD: Downward-sloping trendline near 1.3470 remains key barrier

The British pound faces selling pressure against its major currency peers, trading 0.1% lower at around 1.3420 against the US Dollar during the European trading session on Tuesday.

EUR/USD flatlines above 1.1500, awaits US jobs data

EUR/USD holds steady around 1.1505 in European trading hours on Tuesday. Markets remain cautious ahead of a slew of US jobs data, starting with the JOLTS Job Openings Survey later today. However, the downside appears capped by hot Eurozone inflation in July, bolstering the case for a European Central Bank rate hike at the next meeting.

Gold holds steady above $4,050; hawkish Fed bets favor bearish traders

Gold remains confined in a range below the $4,100 mark through the early European session as traders opt to wait for further developments surrounding the Middle East crisis. Meanwhile, the uncertainty over US-Iran peace talks continues to act as a tailwind for the safe-haven US Dollar.

Aave: Bearish RSI divergence risks a 20% drop despite steady DeFi deposits

Aave (AAVE) extends a mild near-term recovery on Tuesday, holding above its 50-day Exponential Moving Average at $90.80. Aave protocol’s V3 deployment on Monad blockchain recorded over $500 million in deposits over the last month, reflecting increased user adoption.

US JOLTs report in focus

In the US, the June JOLTs report will be in the spotlight. Job openings have increased modestly this year, which has historically predicted rising wage cost pressures ahead. June trade balance data will also be released in the afternoon and the preliminary reading pointed towards a stable trade deficit from May. The Fed's Schmid (non-voter, hawk) will be on the wires overnight.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.