Forex Today: The US labour market comes to the fore

Pablo Piovano FXStreet

As expected, the Federal Reserve left its interest rates unchanged at its event on Wednesday, removing wording regarding potential rate hikes, reiterating that inflation remains elevated and that economic activity has been expanding at a robust pace.

Here is what you need to know on Thursday, February 1:

The greenback derived further strength in response to the hawkish tilt by Chief Powell at its press conference following the widely anticipated decision to leave rates unchanged by the Fed, motivating the USD Index (DXY) to fade the initial pessimism and regain upside traction. Moving forward, Initial Jobless Claims and the ISM Manufacturing PMI should take centre stage on February 1.

EUR/USD challenged YTD lows in the sub-1.0800 region following the Fed gathering, extending at the same time its multi-session consolidative theme. In the euro docket, the final Manufacturing PMI is due on Thursday, along with the flash Inflation Rate in the bloc and the speech by ECB President Lagarde.

It will be a big day for the British pound, as the BoE meets and is largely anticipated to keep its monetary status quo on February 1. Further data will show the final Manufacturing PMI for the month of January. GBP/USD, in the meantime, remained stuck within the so-far yearly range between 1.2600 and 1.2800.

Diminishing US yields prompted a slight drop in USD/JPY, which briefly flirted with the 146.00 support. On Thursday, the only release of note in Japan will be the weekly Foreign Bond Investment.

Further range bound remains the most likely scenario in the near term for AUD/USD. Thursday’s calendar in Oz includes the advanced prints for Building Permits during December.

Crude oil prices dropped markedly in response to a larger-than-expected build of US weekly stockpiles, while Chinese concerns also helped with the downside.

Gold prices rose to two-week highs around the $2050 mark per troy ounce just to end the session around $2030, while Silver prices added to Tuesday’s losses and breached the $23.00 yardstick.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY approaches 158.00 as Japanese Yen resumes decline

USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00. The Japanese Yen extends losses, despite the Bank of Japan's (BoJ) expected rate hike to 1.25% and hawkish Governor Ueda's comments, as two surprise dissents against the rate hike weigh on it.

Gold: Upside remains capped by $4,400

Gold adds to the optimism seen in the second half of the week, trading with decent gains around the $4,370 region per troy ounce on Friday. The yellow metal’s advance finds traction in declining crude oil prices, and manages to offset the continuation of the move higher in the US Dollar and rising US Treasury yields across the curve.

Why altcoin season isn't coming back — and what stole its capital

If, after two years of being frozen in ice, Katara and Sokka woke you up to the crypto market, it would seem like 100 years have passed. With Bitcoin soaring to record highs just over a year ago, everyone expected a routine altcoin season, where investors take profits from the top crypto to chase higher returns in altcoins.

BoJ Recap: Not as hawkish as expected

The BoJ raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks. Governor Kazuo Ueda said the policy phase had changed.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.