Here is what you need to know on Friday, January 13:
After having suffered heavy losses against its major rivals on Thursday, the US Dollar is having a difficult time finding demand early Friday with the US Dollar Index trading flat slightly above 102.00. As investors assess how the December inflation data from the US will shape the Federal Reserve's rate outlook, the benchmark 10-year US Treasury bond yield stays below 3.5% and US stock index futures trade marginally lower on the day. The European economic docket will feature Industrial Production and Trade Balance data for November. In the second half of the day, the University of Michigan's Consumer Sentiment Survey for January and the Fed's Index of Common Inflation Expectations for the third quarter will be looked upon for fresh impetus.
The US Bureau of Labor Statistics announced on Thursday that the annual Consumer Price Index declined to 6.5% in December from 7.1% in November. The Core CPI, which excludes volatile food and energy prices, edged lower to 5.7% from 6% in the same period. Following these data releases, the probability of a 25 basis points Fed rate hike jumped above 90%, according to the CME Group FedWatch Tool, from 75% early Thursday. Additionally, several Fed policymakers voiced their support for a 25 bps rate hike at the next meeting.
During the Asian trading hours on Friday, the data from China revealed that the trade surplus widened to $78 billion from $69.8 billion in November. With this reading surpassing the market expectation for a trade surplus of $76.2 billion, the Shanghai Composite Index gained traction and was last seen gaining more than 1% on the day.
Following Thursday's impressive rally, EUR/USD touched its highest level since April at 1.0868 early Friday before retreating below 1.0850.
GBP/USD gained more than 50 pips on Thursday but seems to have gone into a consolidation phase at around 1.2200 early Friday. The UK's Office for National Statistics reported that the Gross Domestic Product (GDP) expanded by 0.1% in November following October's 0.5% growth. Although this reading came in better than the market expectation for a contraction of 0.2%, it failed to help the Pound Sterling regather its bullish momentum.
USD/JPY fell sharply on Thursday and continued to push lower during the Asian trading hours on Friday. The pair was last seen trading at around 128.70, down 0.4% on the day.
Fueled by falling US Treasury bond yields, Gold price rose above $1,900 for the first time in nearly 8 months. In the early European morning, XAU/USD is moving sideways slightly above $1,890.
Bitcoin capitalized on improving market mood and advanced beyond $19,000 on Thursday, gaining more than 5% on a daily basis. BTC/USD stays in a consolidation phase at around $18,800 early Friday. Ethereum extended its winning streak into a fifth straight day on Thursday and rose above $1,400 before staging a technical correction on Friday.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD tests the major level of 1.0650; followed by the nine-day EMA
EUR/USD remains lackluster during the early Tuesday, hovering near 1.0650. From a technical perspective, analysis suggests a bearish sentiment for the pair as it struggles below the pullback resistance at the 1.0695 level.
GBP/USD: Flat lines around mid-1.2300s, bearish potential seems intact
GBP/USD holds steady on Tuesday amid subdued USD demand, albeit lacks bullish conviction. The divergent Fed-BoE policy expectations turn out to be a key factor acting as a headwind. The technical setup suggests that the path of least resistance for the pair is to the downside.
Gold could see a rebound before resuming the correction
Gold price sees a fresh leg down in Asia on Tuesday even as risk flows dissipate. Receding fears over Middle East escalation offset subdued US Dollar and Treasury bond yields. Gold remains heavily oversold on the 4H chart, rebound appears in the offing.
PENDLE price soars 10% after Arthur Hayes’ optimism on Pendle derivative exchange
Pendle price is among the top performers in the cryptocurrency market today, posting double-digit gains. Its peers in the altcoin space are not as forthcoming even as the market enjoys bullish sentiment inspired by Bitcoin price.
After Monday's relief rally, attention shifts to earnings and policy fronts
With the easing of tensions in the Middle East, safe-haven demand reversed course; global stock markets experienced a modicum of relief. Indeed, in a classic relief rally fashion, Monday saw a rebound in the S&P 500, snapping a six-day losing streak.