ไทม์ไลน์ข่าวสาร forex

NZD/USD declines on Monday, falling back toward recent support at 0.5685.Mixed technical signals highlight uncertainty, with momentum indicators losing clarity.Traders eye key levels, with market sentiment appearing to shift cautiously bearish.The NZD/USD pair faced renewed selling pressure on Monday, declining by 0.45% to settle near 0.5685. This movement underscores the pair’s ongoing volatility, as sharp swings and alternating price levels characterize its recent performance. Despite earlier signs of bullish momentum, the pair now appears to be losing steam, keeping traders cautious about the near-term outlook. Technical indicators present a mixed picture. The Relative Strength Index (RSI) has slid to 54, remaining in positive territory but showing a sharp decline, signaling a waning bullish bias. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram remains flat with green bars, suggesting a lack of clear directional momentum. This divergence between indicators reflects growing uncertainty and raises the possibility of a shift in sentiment toward bearishness. Key levels are likely to guide the pair’s trajectory in the short term. Immediate support is seen at 0.5670, with a break below this level potentially exposing 0.5630. On the upside, resistance remains at 0.5710, and a sustained move above this level would be required to reinvigorate the bullish case. The broader market sentiment and technical clarity will be critical in determining the pair’s next moves. NZD/USD daily chart 

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}AUD/USD slips towards 0.6270 on Monday.Trade tensions between the US and Colombia subside, dampening the Greenback.Fed expected to maintain rates at 4.25%-4.50% on Wednesday.All eyes are on Australian CPI for RBA policy clues.AUD/USD declined at the start of the week towards 0.6270 as US Dollar (USD) gains evaporated following signs that United States (US) friction with Colombia could be cooling. Meanwhile, the Federal Reserve (Fed) is widely anticipated to keep interest rates unchanged this week, with traders searching for any insight into policymakers’ stance amid ongoing calls from President Donald Trump for immediate cuts. The Australian Dollar (AUD), however, faces headwinds ahead of the release of domestic inflation data, which will determine the Reserve Bank of Australia’s (RBA) February rate decision. Daily digest market movers: Aussie loses ground as markets await Fed and Aussie’s CPI The US Dollar initially firmed after President Trump threatened a 25% levy on Colombia for rejecting deportees. The Greenback later fell back as the White House confirmed Colombia’s acquiescence, dousing trade-war fears. Fed policy will be the focus. The US central bank meets on Wednesday and is likely to leave rates within 4.25%-4.50%. Market participants will examine how policymakers react to Trump’s demands for swift interest-rate cuts and assess the potential for future moves. Australian CPI will be pivotal. Fourth-quarter inflation data due Wednesday are forecast at 2.5% year-on-year, down from 2.8%, and a 0.3% quarterly increase following the previous 0.2%. Weak prints could fortify bets that the RBA may begin rolling back its policy tightness as early as the upcoming meeting. AUD/USD technical outlook: Indecision reigns as traders seek clarity The AUD/USD retreated to 0.6270 on Monday, experiencing choppy price action between 0.6200 and 0.6330 since last week. Despite opening the week at 0.6315, the pair settled near 0.6270, hinting at a mild bearish tone. The Moving Average Convergence Divergence (MACD) shows flat green bars, indicating some underlying bullish undercurrents, but the Relative Strength Index (RSI) at 55 points downwards, suggesting declining momentum. With key central bank decisions and inflation data on tap, participants are awaiting a clearer narrative before driving any substantial directional moves. Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

What is DeepSeek? Several Chinese companies pivoted into making their various AI model offerings open source last week, sending shockwaves through the tech sector. Chinese tech startups look set to disrupt the AI space, which has, until recently, been almost singularly dominated by high-priced US tech giants and soaring valuations. Chinese competitors are poised to prove that you can compete with the US giants in the AI game for pennies on the dollar, prompting a steep pullback in key companies that service the AI sphere, specifically Nvidia (NVDA).  Since the launch of OpenAI’s ChatGPT in late 2022, the running assumption among tech investors was that to compete in AI, you needed access to eye-wateringly expensive chipsets, and a bankroll deep enough to set up the necessary data-crunching space that AI models need to be “trained” effectively. Those exact chipsets, and that amount of funding, were previously believed to be locked away behind the walls of the US market, safely embedded in Silicon Valley after the US imposed strict trade restrictions that prevented Chinese companies from accessing US silicon. DeepSeek comes for OpenAI's throne DeepSeek, a tech startup funded by Chinese hedge fund High-Flyer, which stepped into the AI market to compete, has challenged US AI dominance on two fronts: they’ve proven that you can compete with expensive US AI models, and that you can do it cheaply. DeepSeek-R1, the company’s latest LLM-based offering, has made strong first impressions in the tech segment, displaying a technical capacity that rivals incumbent ChatGPT. The company also has declared that it was able to create its latest model for a mere $6 million USD, far below the billions of venture capital dollars that have been showered on the US tech segment focused on AI development. Adding to pressures on US-based tech companies, DeepSeek made its models open source; squelching investor hopes that the key to eventual profitability in the AI game would be the proprietary nature of current AI giants. Some tech commentators have come out of the woodwork to point out that markets don’t know the exact investment cost of DeepSeek’s model-building but that the price tag likely runs much higher than DeepSeek has claimed.

The US Dollar began the new trading week on the back foot as market participants continued to digest the narrative of further tariffs from the Trump administration, while investors started gearing up for the FOMC meeting on Wednesday.Here is what you need to know on Tuesday, January 28: The US Dollar Index (DXY) printed moderated losses, although it managed to regain some traction after bottoming out near 107.00. Durable Goods Orders will be released in the first turn, seconded by the FFA’s House Price Index, the Conference Board’s Consumer Confidence, and the Richmond Fed Manufacturing index, all ahead of the API’s weekly report on US crude oil inventories.EUR/USD rose to fresh yearly peaks around 1.0530 on the back of the offered stance in the Greenback, just to reverse part of those gains towards the end of the day. The ECB’s Cipollone and Lagarde are due to speak. GBP/USD alternated gains with losses around 1.2480 following an early move beyond the 1.2500 milestone. The BRC Shop Price Index should give a view of how inflation pressure fared in the first month of the year. USD/JPY retreated sharply to six-week lows near 153.70 on the back of investors’ repricing of further tightening by the BoJ. The publication of the BoJ Minutes will be the next salient event in Japan on January 29. AUD/USD suffered the disheartening prints from the Chinese PMIs over the weekend and deflated to the sub-0.6300 region on Monday. Next on tap in Oz will be the release of the Business Confidence gauge by NAB. WTI remained well on the defensive and flirted with the area of yearly lows near the $72.00 mark per barrel on the back of steady uncertainty surrounding President Trump’s tariffs plans. Gold prices corrected lower from the vicinity of their all-time peaks seen last Friday and retested the area of multi-day lows near $2,730 per ounce troy. Silver prices followed suit and traded at shouting distance from its key 200-day SMA around the $30.00 mark per ounce.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}Mexican Peso under pressure following Trump tariff threat on Colombian goods.Banxico's new monetary program hints at aggressive rate cuts, a headwind for the Peso.Traders await upcoming Mexican economic reports on unemployment and preliminary Q4 GDP.The Mexican Peso plummeted against the Greenback on Monday after US President Donald Trump announced on Sunday that he would impose tariffs on Colombian goods after Colombian President Gustavo Petro wouldn’t allow planes from the United States (US) to carry migrants on deportation flights. Trump then backtracked on the tariffs on Monday morning once the two leaders came to a deal to allow the deportations. This and Banco de Mexico's (Banxico) dovish rhetoric sponsored a leg-up in the exotic pair. The USD/MXN trades at 20.70, up by more than 2%. Over the weekend, US President Donald Trump informed his social network of Petro’s decision, which sparked several US retaliation measures including the tariff threat. Consequently, the Mexican Peso, used as a proxy for other Latin American currencies, weakened in early trading on Monday. In the meantime, the Instituto Nacional de Estadistica Geografia e Informatica (INEGI) revealed that the Balance of Trade posted a surplus in December. However, seasonally adjusted, the deficit narrowed compared to November figures. Meanwhile, Banxico presented its Monetary Program for 2025, in which the Central Bank hinted that the Governing Board is eyeing cuts to its main reference rate of a greater magnitude than previously seen in 2024. Banxico’s Governor Victoria Rodriguez Ceja said that they see an adverse scenario with Trump, adding that some of his policies could pressure Mexico’s economy. She added, “On the one hand, greater economic weakness would tend to moderate pressures on prices and, on the other hand, a greater exchange rate depreciation represents an upward risk for inflation. These effects in opposite directions could even offset each other, but we would have to be attentive, if necessary, to the measures that could be implemented.” Ahead this week, Mexico’s economic docket will feature the Unemployment Rate for December, along with the release of preliminary Q4 2024 Gross Domestic Product (GDP) figures. Daily digest market movers: Mexico’s Balance of Trade failed to bolster the Peso INEGI revealed that the Balance of Trade for December was 2.567 billion, up from a -0.133 billion deficit. Seasonally adjusted, the trade deficit narrowed from -0.775 billion to -0.684 billion for the same period. Economists polled by Reuters project GDP to dip -0.2% QoQ from an expansion of 1.1%. On an annual basis, GDP is foreseen to edge lower from 1.6% to 1.2%. Citi revealed its Expectations Survey, in which Mexican private economists revised GDP figures for 2025 downward to 1%. Regarding inflation expectations, analysts estimate headline and core inflation to dip below 4%, each at 3.91% and 3.68%, while the exchange rate would likely end near 20.95. Economists estimate that Banco de Mexico (Banxico) will lower rates by 25 basis points (bps) from 10.00% to 9.75%, though some analysts expect a 50 bps cut at the February 6 meeting. Money market futures have priced in 54 bps of Fed rate cuts in 2025, according to CME FedWatch Tool data. USD/MXN technical outlook: Mexican Peso treads water as USD/MXN approaches to year-to-date (YTD) high The USD/MXN pair resumed to the upside after clearing the 50-day Simple Moving Average (SMA) at 20.38 since early trading during the Asian session. Trump’s tariff threats on Colombia weakened the Mexican Peso amid a risk-averse scenario, as the Peso plunged to a four day low of 20.74. If traders clear the USD/MXN record high of 20.90, buyers would be in charge and challenge the 21.00 mark. On further strength, the next resistance would be the March 8, 2022 peak at 21.46, ahead of the 22.00 figure. Conversely, if USD/MXN falls below the 50-day SMA of 20.38 and extends its losses toward the 100-day SMA at 20.06, bears could aim to push prices toward the 20.00 mark.Mexican Peso FAQs What key factors drive the Mexican Peso? The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity. How do decisions of the Banxico impact the Mexican Peso? The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN. How does economic data influence the value of the Mexican Peso? Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate. How does broader risk sentiment impact the Mexican Peso? As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Dollar Index remains under heavy pressure, slipping below 108.00 and testing the critical 107.00 level.New Home Sales in December beat estimates, rising to 698,000 units versus expectations of 670,000.President Trump’s tariff threats on Colombia imports and Wednesday’s Federal Reserve decision add uncertainty to the Dollar’s trajectory.The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against a basket of currencies, continues to slide on Monday, breaking below the psychological 108.00 mark. Concerns over AI-related market valuation, combined with geopolitical tensions from President Donald Trump’s tariff threats against Colombia, contribute to bearish sentiment. Economic data highlights some resilience in the United States (US) economy, but the Dollar remains under pressure ahead of the Federal Reserve’s (Fed) Wednesday decision on interest rates. Daily digest market movers: US Dollar under pressure amid Fed anticipation and geopolitical tensions The Chicago Fed National Activity Index for December rebounded to 0.15 from -0.01 in November, reflecting stronger economic activity. December New Home Sales surged to 698,000 units, surpassing the forecast of 670,000 and November's 674,000 figure. President Trump’s proposal to impose 50% tariffs on Colombian imports over deportation disputes rattles trade markets and global sentiment. Markets will look for further clues on the incoming president’s plans on tariffs on its North American neighbors. Federal Reserve’s Wednesday meeting looms large; markets are watching closely for updates on rate decisions and economic outlook with a hold priced in. Both the statement and Chair Jerome Powell’s tone will be closely looked upon by the markets. DXY technical outlook: Bearish momentum builds further The US Dollar Index remains below 108.00, showing persistent downward momentum. The Relative Strength Index (RSI) continues to linger under the neutral 50 mark, indicating weak relative strength. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram deepens in the red, signaling intensifying bearish pressure. Although the index is testing oversold conditions, the downside risks remain, with the potential to breach 107.00. A corrective bounce could occur if the movement becomes overstretched, but recovery beyond 108.50 appears challenging unless sentiment shifts significantly. For now, the path of least resistance points further downward. US Dollar FAQs What is the US Dollar? The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away. How do the decisions of the Federal Reserve impact the US Dollar? The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback. What is Quantitative Easing and how does it influence the US Dollar? In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar. What is Quantitative Tightening and how does it influence the US Dollar? Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Canadian Dollar shed 0.3% on Monday as Loonie flows dry up.The Bank of Canada is due to cut interest rates again later this week.Little else is on the economic data docket to drive the Loonie this week.The Canadian Dollar (CAD) fell back once again into familiar consolidation against the US Dollar (USD) on Monday, shedding a recently-gained one-third of one percent and continuing to send the USD/CAD pair on a sideways grind around the 1.4400 handle.  The Bank of Canada (BoC) will be delivering its latest rate call later this week, and the Canadian central bank is broadly forecast to deliver another 25 bps rate cut. Even this is still going to be cast within the lens of Greenback moves: the Federal Reserve (Fed) is due for its own rate cut, slated to release within hours of the BoC rate call. Daily digest market movers: Canadian Dollar continues to grind through consolidation The Canadian Dollar fell 0.3% on Monday, pushing USD/CAD back up toward 1.4400. BoC is widely expected to cut interest rates by a quarter of a point. Fed is forecast to hold rates steady. Despite the Fed’s expected hold, markets are expecting more rate cuts from the Fed this year than before. The CME’s FedWatch Tool shows rate traders pricing in a total of 50 bps in Fed rate cuts through 2025. Canadian Dollar price forecast The Canadian Dollar just can’t catch a break, continuing to grind between key technical handles and keeping USD/CAD chart prints hobbled between 1.4400 and 1.4300. The pair has ground through chart paper in a sideways pattern since mid-December, and momentum remains absent from the pair despite the Loonie routinely testing multi-year lows against the Greenback. A rising 50-day Exponential Moving Average (EMA) testing into 1.4250 is pricing in a technical floor beneath price action, limiting Loonie bulls’ options for a runaway CAD bid to pick up speed. On the high side, 1.4500 remains the key level for Greenback bidders to beat, though even CAD sellers are struggling to justify the excessively high USD/CAD bids. USD/CAD daily chartCanadian Dollar FAQs What key factors drive the Canadian Dollar? The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. How do the decisions of the Bank of Canada impact the Canadian Dollar? The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive. How does the price of Oil impact the Canadian Dollar? The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD. How does inflation data impact the value of the Canadian Dollar? While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar. How does economic data influence the value of the Canadian Dollar? Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.  

CTAs are selling Copper and Aluminum, TDS' Senior Commodity Strategist Daniel Ghali notes. Trump dampens his tone with respect to tariffs on China"CTAs are selling Copper and Aluminum, with price action playing into the significant asymmetry in expected flows following President Trump's dampened tone with respect to tariffs on China." "With no scenario for price action over the coming week likely to attract subsequent buying programs, the weakness in prices is now sufficiently large to catalyze large-scale CTA selling activity in the red metal, with up to -25% of algos' max size likely sold this session."

The set-up for algo flows in Silver are not very promising, TDS' Senior Commodity Strategist Daniel Ghali notes. A breakout appears imminent "Over the coming sessions, subsequent CTA selling activity can hit the tapes, but we expect that new ATHs in Gold could finally catalyze a breakout in Silver markets, where we see unique implications from the dislocations in metals markets associated with tariff threats. The market is sleepwalking into a silversqueeze with flat prices thus far showing little appreciation for the recent developments in physical trading activity." "A breakout appears imminent given a) the XAU/XAG ratio sits at the highs, b) CTAs and discretionary traders both hold significant dry-powder to deploy, c) SHFE Silver aggregate open interest sits at multiyear lows, but the largest traders in Shanghai have been adding to their books over the last months." "D) London Silver continues to trade tight, e) assumptions that any potential silversqueeze will easily be resolved fail to recognize that pressure release valves require higher prices first before they can kick in. Explosive upside convexity in Silver markets remains severely underpriced."

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Dow Jones tumbled during the overnight session before Monday’s opening bell.Trade war fears are back on the table after Trump gets into a political scuffle with Colombia.Fresh rate cut hopes are bolstering equities from early week lows.The Dow Jones Industrial Average (DJIA) dipped into the 44,000 handle during Monday’s early overnight session, driven lower by a fresh bout of souring in investor risk appetite after a Chinese company globally released an open-source competitor to US-based AI models that have been largely proprietary up to this point. Investor sentiment was driven further into the floorboards by a political spat between United States (US) President Donald Trump and Colombia over the weekend after a disagreement between the two countries over the return of Colombian migrants from the US led to President Trump losing his cool and threatening a 50% tariff on all goods imported into the US from Colombia. Equities rallied in the early hours of the US market session as investor focus pivoted to rate cut hopes from the Federal Reserve (Fed). The Fed is due to deliver its latest rate call later this week, and although the US central bank is broadly expected to stand pat on rates for the time being, traders are ramping up their bets of further rate cuts in 2025. According to the CME’s FedWatch Tool, rate markets are pricing in a full 50 bps of rate trims through the rest of the year, up from last week’s bets of 25 bps. The tech sector got rattled after a Chinese artificial intelligence lab released their DeepSeek-R1 AI model, making it open source and proving that anybody can develop a heavy-hitter AI model without heavy investment in expensive US-produced silicon and microchips, something that US trade barriers were explicitly instituted to keep out of the hands of the Chinese. With DeepSeek making waves in the AI space, investors are questioning the point of keeping up silicon trade barriers with China and investors who have bought into US-based tech companies providing chip solutions for AI projects are getting nervous. Dow Jones news Despite struggling to pare losses and return to Friday’s closing bids, most of the Dow Jones’ listed securities are on the rise during Monday’s US trading session. However, losses are largely contained within key tech darlings, keeping the DJIA off-kilter. Nvidia (NVDA) is taking it on the chin on Monday, down around 13% on the day and testing below $125 per share with the silicon-puncher’s dominance in the AI space getting threatened by spunky Chinese upstart DeepSeek hinting that Nvidia’s market dominance may not last forever, or even for the rest of the year. Dow Jones price forecast The Dow Jones kicked off the new trading week with a fresh test of the 44,000 handle, but the index’s early pivot into the bearish side is facing a fresh upshot from bidders, and it has climbed back into range of 44,400. Despite near-term declines, the major equity index is still tilted firmly toward the bullish side, closing in the green for all but two of the last ten consecutive trading days. The Dow Jones is still trading on the wrong side of record highs above 45,000 posted last November. Still, equity traders are pushing stocks back up the same old hill as the DJIA climbs from the last major swing low into the 41,700 region. Dow Jones daily chartDow Jones FAQs What is the Dow Jones? The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500. What factors impact the Dow Jones Industrial Average? Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions. What is Dow Theory? Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits. How can I trade the DJIA? There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.  

There's an ongoing algo selling activity in Gold, TDS' Senior Commodity Strategist Daniel Ghali notes. Gold selling activity to remain short-lived"The yellow metal is being swept into this round of deleveraging and CTA liquidations, but our simulations of future prices suggest that CTAs will be back on the bid in Gold in any scenario for prices over the coming sessions, suggesting this round of selling activity will remain short-lived." "Further, macro funds & discretionary traders have replenished their war chest of dry-powder to deploy, with evidence suggesting macro fund purchases are back on the rise. After all, rates markets are already priced for a hawkish outcome, whereas the USD's relentless rally has not only failed to weigh on precious metals amid signs of Mystery Buying, but US10y yields are notably strengthening into this risk-off trading activity, and geopolitical uncertainty remains elevated.""While macro funds will redeploy their capital into the yellow metal's warm embrace, CTAs will contribute to further gains whereas a reversal in the current trends in price action would likely be mitigated by 'Mystery Buying' associated with Asian currency depreciation pressures."

.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a}EUR/GBP fluctuates within 30 pip range, holds above 0.8400 with a minor 0.02% increase.Sterling faces pressure as China's manufacturing PMI downturn favors Euro gains.Technical outlook suggests consolidation potential; key resistance at 200-day SMA of 0.8422.The EUR/GBP is firm during the North American session, after seesawing in a 30 pip range, though buyers reclaimed the 0.8400 figure for a small gain of 0.02%. Market mood remains negatively, on news that China’s business activity worsened in January according to the National Bureau of Statistics (NBS) Manufacturing PMI. This weighed on Sterling, which is weakened against the single currency. EUR/GBP Price Forecast: Technical outlook The EUR/GBP has extended its losses below the 200-day Simple Moving Average (SMA) at 0.8422, which has opened the door to test challenge lower prices, but bulls are stepping in around the 0.8400 figure. The relative Strength Index (RSI) is bullish, though it has turned flat, an indication that the cross might consolidate, before resuming its ongoing uptrend. For a bullish continuation, buyers must crack the 200-day SMA. If cleared, the next stop will be the January 24 daily high at 0.8462, ahead of the next cycle high at 0.8473 the January 20 peak. On the other hand, if sellers push prices below the 0.8400 figure, the next support would be the latest pivot low of 0.8383 the January 14 low, followed by the 100-day SMA at 0.8347. EUR/GBP Price Chart – DailyEuro PRICE Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.   USD EUR GBP JPY CAD AUD NZD CHF USD   -0.03% 0.07% -0.68% 0.20% 0.58% 0.48% -0.48% EUR 0.03%   0.17% -0.54% 0.37% 0.62% 0.63% -0.35% GBP -0.07% -0.17%   -1.00% 0.20% 0.45% 0.48% -0.51% JPY 0.68% 0.54% 1.00%   0.94% 1.46% 1.41% 0.36% CAD -0.20% -0.37% -0.20% -0.94%   0.18% 0.28% -0.71% AUD -0.58% -0.62% -0.45% -1.46% -0.18%   0.05% -0.92% NZD -0.48% -0.63% -0.48% -1.41% -0.28% -0.05%   -1.20% CHF 0.48% 0.35% 0.51% -0.36% 0.71% 0.92% 1.20%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).  

EUR/JPY drops sharply on Monday toward key 162.00 support levels.Technical indicators show mounting selling pressure, with the pair nearing the 20- and 100-day SMA convergence.Focus shifts to whether the pair can stabilize around 162.00 or risk further downside.The EUR/JPY cross extended its losses on Monday, falling by 0.90% to settle at 162.15. The move highlights increased bearish momentum as the pair approaches a critical technical juncture, with the 20- and 100-day Simple Moving Average (SMA) convergence at 162.00 set to serve as a significant support zone. The steep decline marks a continuation of the downward trend observed over recent sessions, putting buyers under renewed pressure. Technical indicators reinforce the bearish outlook. The Relative Strength Index (RSI) has dropped sharply to 49, slipping into negative territory and signaling weakening buying interest. Simultaneously, the Moving Average Convergence Divergence (MACD) histogram displays decreasing green bars, reflecting fading bullish traction and a growing bearish bias in the short term. Looking ahead, the 162.00 level, where the 20- and 100-day SMAs converge, will be crucial in determining the pair’s next move. A decisive break below this area could open the door to further losses, with the next support seen at 161.50. Conversely, stabilization above this zone may encourage buyers to regroup and attempt a recovery toward the 163.00 resistance level. The pair’s ability to hold its ground at these critical levels will shape its trajectory in the coming sessions. EUR/JPY daily chart

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It's a quiet week on the UK side of the economic calendar, and trade war murmurs as well as an impending Federal Reserve (Fed) rate call are keeping market attention off of the Cable trade for now. The Federal Reserve (Fed) is expected to hold rates steady at their upcoming meeting slated for Wednesday, but overall market expectations of further rate cuts for the year are on the rise. According to the CME's FedWatch Tool, rate markets are pricing in a total of 50 bps in rate cuts through 2025, up from the previous forecast of 25 bps. US President Donald Trump kicked off his first meaningful trade war spat over the weekend with Colombia of all countries, threatening a wide 50% tariff on all goods from Colombia imported into the US if the country refused to accept planes loaded with Colombian migrants being returned home from the US. Most of the spat took place on social media and had little measurable impact on global markets. Still, President Trump's tariff threats and his willingness to use them on short notice will likely ruffle some feathers for investors that have been used to a less-chaotic method of trade governance. GBP/USD price forecast GBP/USD has beaten footprints into the charts on both sides of the 1.2500 handle on Monday, chalking in an intraday high above 1.2520 before pivoting back into the low side near 1.2480. With price action getting hung up on tech levels just south of the 50-day Exponential Moving Average (EMA) at 1.2517, bids are at risk of pricing in a near-term ceiling and giving bears a foothold in the daily charts. GBP/USD daily chartPound Sterling FAQs What is the Pound Sterling? The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

The Pound Sterling (GBP) is trading marginally firmer on the session and has improved a little relative to Friday’s intraday peak, Scotiabank's Chief FX Strategist Shaun Osborne notes.  GBP holds solid technical gain from last week "There were no UK data reports today and the GBP’s performance simply reflects the broader USD tone—and, perhaps, some signs of technical strength." "GBP closed out last week firmly, cementing the third leg of a bullish “morning star” candle pattern on the weekly chart. Price also broke above bear trend resistance off the September peak."  "Solid gains again today so far, at least, support the more positive technical outlook and the prospect of a retracement towards the 1.26/1.27 range (1.2610 is the 38.2% retracement of the 1.34/1.21 decline). Support is 1.2415/25."

EUR/USD is holding close to last week’s high, supported by some further narrowing in EZ/US spreads as US yields retreat. The 2Y gap has narrowed to –195bps, the narrowest since early November, Scotiabank's Chief FX Strategist Shaun Osborne notes. Lower US yields compress spreads "Germany’s IFO survey reflected a small improvement in the business climate reading for January while expectations eased slightly, reflecting an economy that continues to languish."  "Solid EUR gains through the low/mid 1.04 area last week are supporting a more positive technical undertone, at least in the short run. A deeper retracement of the EUR’s Q4/Q1 slide towards the 106 area (38.2% retracement resistance sits at 1.0572) appears likely. Support is 1.0450/55."

The Canadian Dollar (CAD) is recovering a little ground after weakening in early Asian trade on the broad risk-off tone to markets, Scotiabank's Chief FX Strategist Shaun Osborne note, Scotiabank's Chief FX Strategist Shaun Osborne notes.   Technicals remain positive "The CAD picked up some ground on the weaker USD last week but it lagged all of its major currency peers, except the JPY. While broader tariff risks appear to have eased for some, the threat being aggressively tariffed from February 1 hangs over Canada and Mexico and that threat is likely to preclude any major gains in the CAD for now."  "Beyond that, the CAD will have a hard time gaining significantly on the USD while interest rate differentials remain wide. The BoC is likely to cut its policy rate 25bps this week, with swaps more or less fully pricing in a ¼-point cut. USD/CAD fair value sits at 1.4210 this morning." "There are some distinctly positive signs for the CAD on the charts. Last week, USD/CAD cracked trend support that has guided USD/CAD higher since September. Daily price action shows a developing broadening top signal and the weekly chart reflects a bearish key reversal week formed last week. Key support is 1.4255—23.6% retracement of the Q4/Q1 rally; a break below here targets a drop back to 1.40/1.41. Resistance is 1.4415 and 1.4445/55."

.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a} .fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}USD/JPY dives sharply to near 154.00 as the Japanese Yen performs strongly on safe-haven demand.The BoJ hikes interest rates by 25 bps but didn’t provide a specific interest rate hike path.The US Dollar declines as Trump reverses the 25% tariff proposal on Columbia and an acceleration in Fed dovish bets.The USD/JPY pair plunges to near 154.00 in Monday’s North American session. The asset weakens as the Japanese Yen (JPY) outperforms its major peers, with investors rushing to safe-haven fleet amid a sharp sell-off in United States (US) technology stocks. Japanese Yen PRICE Today The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Australian Dollar.   USD EUR GBP JPY CAD AUD NZD CHF USD   -0.23% -0.20% -1.03% 0.10% 0.38% 0.23% -0.75% EUR 0.23%   0.11% -0.66% 0.48% 0.63% 0.59% -0.41% GBP 0.20% -0.11%   -1.06% 0.38% 0.52% 0.50% -0.51% JPY 1.03% 0.66% 1.06%   1.19% 1.61% 1.51% 0.43% CAD -0.10% -0.48% -0.38% -1.19%   0.08% 0.12% -0.88% AUD -0.38% -0.63% -0.52% -1.61% -0.08%   -0.00% -0.99% NZD -0.23% -0.59% -0.50% -1.51% -0.12% 0.00%   -1.22% CHF 0.75% 0.41% 0.51% -0.43% 0.88% 0.99% 1.22%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote). US technology stocks plunged after analysts predicted that DeepSeek’s Artificial Intelligence (AI) model of China performs on par with top chatbots like OpenAI at affordable costs. Apart from the Japanese Yen, the Swiss Franc (CHF) is also performing strongly, being a safe-haven asset. The Yen is also trading strongly on the back of an interest rate hike decision by the Bank of Japan (BoJ). The central bank raised its borrowing rates by 25 basis points (bps) to 0.5% on Friday amid confidence that sustained wage growth would keep inflationary pressures above the desired rate of 2%. The BoJ refrained from committing a pre-defined policy-restrictive path but said that they would raise interest rates further if the economy continued to perform in line with their expectations. On early Monday, the US Dollar (USD) also performed strongly on multiple tailwinds such as US President Donald Trump’s threat to impose 25% tariffs on Columbia for refusing to accept military flights carrying illegal immigrants from their nation and the uncertainty ahead of Federal Reserve’s (Fed) monetary policy meeting on January 28-29, but surrenders its entire gains and resumed its downside journey towards the seven-week low. Later, Trump dialed back his proposal of placing tariffs on Columbia as the South American nation accepted his terms, which diminished the USD’s safe haven. On the monetary policy front, an acceleration in Fed dovish bets also weighed on the US Dollar. Traders now expect the Fed to cut interest rates by 50 bps this year, but it is widely anticipated to keep interest rates steady in the range of 4.25%-4.50% on Wednesday. Japanese Yen FAQs What key factors drive the Japanese Yen? The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors. How do the decisions of the Bank of Japan impact the Japanese Yen? One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen. How does the differential between Japanese and US bond yields impact the Japanese Yen? Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential. How does broader risk sentiment impact the Japanese Yen? The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.  

The US Dollar (USD) is mixed to weaker in what is a rough start to the week for markets. Stocks are trading sharply lower following the emergence of a Chinese AI startup — DeepSeek — which could potentially challenge the US’ dominance in the field (and take some steam out of tech valuations). US equity futures reflect a near 4.1% drop in the Nasdaq 100, with the S&P 500 down 2.3%. Both are trading off early lows, Scotiabank's Chief FX Strategist Shaun Osborne note.  USD loses ground to havens "European markets are down, but losses are less severe. Bond are bid and part of the USD’s slippage can be accounted for by the sharp fall in bond yields — US 10Y yields are down 12bps on the session while European government 10Y debt yields are down 5-7bps. Haven demand has spilled over into FX, with the JPY surging 1.3% and the CHF gaining 0.9% on the session."  "USD losses today add to the slide seen over the past two weeks amid as President Trump’s broad and severe tariff threats recede — to some extent. The DXY looks poised to extend losses in the short run and retest the late Nov/early Dec levels for the DXY in the low 106s."  "Focus will shift to interest rate policy later this week, with Fed likely to hold rates steady amid slow progress on inflation, resilient growth and the FOMC probably wanting time to assess the potential impact of the new administration’s policy priorities. Steady rates may prompt a response from the president—who has made it clear that he thinks rates should be lower."

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The Loonie pair ticks down as the US Dollar (USD) falls back after its safe haven diminished. United States (US) President Donald Trump put his proposal of imposing 25% tariffs on Columbia on hold Over the weekend, Trump threatened to raise 25% tariffs on its South American trading partner as they refused to accept the entry of military flights from the US carrying illegal immigrants who have the nationality of Columbia. This scenario boosted the US Dollar’s safe-haven appeal as investors expected that it would set the tone for a global trade war. However, Trump vetoed his proposal after Columbia accepted his terms, which squared the USD’s appeal. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, resumes its downside journey towards the seven-week low of 106.70. Going forward, investors will focus on the Federal Reserve’s (Fed) monetary policy decision, which will be announced on Wednesday. The Fed is expected to announce a pause in the current policy-easing spell and leave interest rates unchanged in the range of 4.25%-4.50%, according to the CME FedWatch tool. Investors will pay close attention to Fed Chair Jerome Powell’s press conference after the policy announcement for fresh interest rate guidance. Meanwhile, the Canadian Dollar (CAD) remains broadly weak as investors fear that Trump will impose 25% tariffs on Canada on February 1. The Wall Street Journal (WSJ) reported on early Monday that “momentum is growing among US President Trump’s advisers to place 25% tariffs on Mexico and Canada as soon as February 1. Investors should brace for significant volatility in the Loonie this week. The Bank of Canada (BoC) is scheduled to announce its first monetary policy decision of 2025 on Wednesday. The BoC is expected to cut interest rates by 25 basis points (bps) to 3%. Economic Indicator BoC Interest Rate Decision The Bank of Canada (BoC) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoC believes inflation will be above target (hawkish), it will raise interest rates in order to bring it down. This is bullish for the CAD since higher interest rates attract greater inflows of foreign capital. Likewise, if the BoC sees inflation falling below target (dovish) it will lower interest rates in order to give the Canadian economy a boost in the hope inflation will rise back up. This is bearish for CAD since it detracts from foreign capital flowing into the country. Read more. Next release: Wed Jan 29, 2025 14:45 Frequency: IrregularConsensus: 3%Previous: 3.25%Source: Bank of Canada  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} The US Dollar sees some safe-haven inflows during the Asian session on Monday. US President Trump threatened to slap 50% tariffs on Colombia imports in a deportation spat. The US Dollar Index (DXY) sinks below 108.00 and hits a key moving average.The US Dollar Index (DXY), which tracks the performance of the US Dollar against six different major currencies, edges slightly lower and trades around  107.30 at the time of writing on Monday despite some earlier safe-have inflows during the Asian session. Markets got spooked after United States (US) President Donald Trump threatened to slap 50% tariffs on Colombian imports after the country refused to take in deported immigrants from the US during the weekend. Traders now reassess their earlier dovish stance on tariffs as it seems clear they will be used more heavily as a leverage tool.  On the economic data front, all eyes are on the US Federal Reserve (Fed) and the European Central Bank (ECB), which will announce their first monetary policy decisions this year on Wednesday and Thursday, respectively. While the ECB is set to deliver another 25 basis points (bps) rate cut, the Fed is expected to keep borrowing costs unchanged. For this Monday, the Chicago Fed National Activity Index for December is the main data point to focus on. Daily digest market movers: All eyes on WednesdayAt 13:30 GMT, the Chicago Fed National Activity Index for December is due. The previous reading was at -0.12, with no forecast available.  At 15:00 GMT, New Home Sales data for December is due, with expectations for a jump in sales to 0.67 million units from 0.664 million in November.  The US Treasury will have its work cut out for this Monday with two auction moments due: at 16:30 GMT, short-term 3-month and 6-month bills will be allocated. At 18:00 GMT, medium-term 2-year and 5-year notes are due for auction.  Equities sink on Monday due to concerns over AI valuations and overestimated earnings in the tech sector. All European indices and US equity futures trade down over 1%. The CME FedWatch tool projects a 43.8% chance that interest rates will remain unchanged at current levels in the May meeting, suggesting a rate cut that month. Expectations are that the Federal Reserve (Fed) will remain data-dependent with uncertainties that could influence inflation during US President Donald Trump’s term.  The US 10-year yield is trading around 4.526%, further away from its more-than-one-year high earlier this month at 4.807%.US Dollar Index Technical Analysis: Turning uglyThe US Dollar Index (DXY) is overpassed in this Monday’s bid for a safe haven. Instead, investors are picking up more US bonds and the Japanese Yen (JPY). The latter is currently rallying over 1% against the US Dollar, weighting on the DXY as it accounts for 13.6% of weight. Expect volatile moves in the DXY by Wednesday during the Fed decision announcement.  There is a long road to recovery. First, the psychological level of 108.00 must be recovered. From there, 109.29 (July 14, 2022, high and rising trendline) is next to pare back last week’s losses. Further up, the next upside level to hit before advancing further remains at 110.79 (September 7, 2022, high).  On the downside, the convergence of the high of October 3, 2023, and the 55-day Simple Moving Average (SMA) around 107.56 should act as a double safety feature to support the DXY price. For now, that looks to be holding, though the Relative Strength Index (RSI) still has some room for the downside. Hence, rather look for 106.52 or even 105.89 as better levels for US Dollar bulls to engage and trigger a reversal. US Dollar Index: Daily Chart US Dollar FAQs What is the US Dollar? The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away. How do the decisions of the Federal Reserve impact the US Dollar? The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback. What is Quantitative Easing and how does it influence the US Dollar? In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar. What is Quantitative Tightening and how does it influence the US Dollar? Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.  

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The Oil price rises as the market sentiment turns cheerful after United States (US) President Donald Trump reverses tariff threats on its South American trading partner, Columbia. Trump takes back tariff threats after Columbia accepted the return of illegal immigrants from the US. Investors should note that Columbia exports a significant amount of seaborne crude to the US. Technically, this development is negative for the Oil price but it gains as the scenario indicates that Trump tariff threats are not fearful that what market participants had anticipated earlier. Last week, Trump also reversed the proposal of imposing tariffs on China, saying that he can reach a deal without slapping hefty tariffs. Market participants expect Trump will uses tariffs for getting a better negotiation against US’s trading partners. However, the broader outlook of the US Dollar remains uncertain as Trump reiterated that OPEC should cut Oil prices, which would hurt Russia’s finances and eventually lead to a truce between Russia and Ukraine. "One way to stop it quickly is for OPEC to stop making so much money and drop the price of oil, and that war will stop right away," Trump said at World Economic Forum (WEF) in Davos on Friday. Also, China’s economic turmoil continue to weigh on Oil demand’ prospects. The National Bureau of Statistics (NBS) reported that the China’s Manufacturing Purchasing Managers’ Index (NBS) declined to 49.1 in January from 50.1 in December. Economists expected the factory data to have expanded at a steady pace. Brent Crude Oil FAQs What is Brent Crude Oil? Brent Crude Oil is a type of Crude Oil found in the North Sea that is used as a benchmark for international Oil prices. It is considered ‘light’ and ‘sweet’ because of its high gravity and low sulfur content, making it easier to refine into gasoline and other high-value products. Brent Crude Oil serves as a reference price for approximately two-thirds of the world's internationally traded Oil supplies. Its popularity rests on its availability and stability: the North Sea region has well-established infrastructure for Oil production and transportation, ensuring a reliable and consistent supply. What factors drive the price of Brent Crude Oil Like all assets supply and demand are the key drivers of Brent Crude Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of Brent Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of Brent Crude Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of Brent Crude Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of Brent Crude Oil OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact Brent Crude Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.  

EUR net short positions have increased, driven by an increase in short positions. GBP net positions have turned short for the first time since May 2024, driven by a decrease in long positions, Rabobank's FX analysts jane Foley and Molly Schwartz note. GBP has strengthens against USD "The EUR has performed well vs. the USD in the month-to-date as of January 26th, supported by short-covering. The market is pricing in a 25bp ECB cut at the January 30th meeting."     "GBP has strengthened against USD after hitting one-year lows on January 13th, with GBP/USD now trading at 1.2455. The market is pricing in 93% of a 25bp cut at the February 6th BoE meeting."

Canadian Dollar (CAD) net short positions have decreased for the second week in a row, driven by a decrease in short positions. The Australian Dollar (AUD) net short positions have decreased for the first time in four weeks, driven by an increase in long positions, Rabobank's FX analysts jane Foley and Molly Schwartz note. Market is pricing in a 25bp cut at the BoC meeting"Canadian CPI inflation registered in line with expectations at -0.4% m/m, filtering through to a y/y print of 1.8%. The BoC is now equally concerned with CPI inflation registered above or below target 2.0%, and the market is pricing in a 25bp cut at the January 29th BoC rate decision." "The RBA has been one of the most hawkish banks in this current rate cycle, and the market is now pricing in 77% of a 25bp cut at the next RBA meeting on February 18th . Q4 CPI inflation data are due on January 29."

USD/SGD fell, tracking broader moves in the USD. USD/SGD fell; last seen trading at 1.3428, OCBC's FX analysts Frances Cheung and Christopher Wong note. Consolidation likely with some rebound risks"In the interim, no immediate tariff is supportive of risk sentiments while also taming USD bulls. But tariff concerns remain, and this could still keep risk appetite restrained, thereby implying that USD dips may still find support." "Daily momentum remains bearish while RSI shows signs of turning higher from near oversold conditions. Consolidation likely with some rebound risks. Resistance at 1.3520/40 levels (50 DMA, 23.6% fibo retracement of Sep low to Jan high), 1.3630 (21 DMA)."

US Dollar (USD) net long positions have increased for the fifth consecutive week, driven by a decrease in short positions, Rabobank's FX analysts jane Foley and Molly Schwartz note. Market is pricing in a no-change Fed decision"USD net short positions are at their highest level since September 2024, though profit-taking has now been evident in the spot market." "US CPI inflation registered in line with expectations at 0.4% m/m in the headline, but a slightly cooler core CPI print at 0.2% m/m drove a 12.5bp drop in the 10yr, which has only grinded lower since. The market is pricing in a no-change decision for the January 29th Fed meeting."

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The Aussie pair rebounds as the US Dollar (USD) surrenders gains and turns negative, with the US Dollar Index (DXY) falling back to near the five-week low of 107.20 from the intraday high of 107.75. The USD Index attracted significant bids at the start of the week after United States (US) President Donald Trump proposed 25% tariffs on Columbia for not accepting military flights carrying deportees. The event prompted risks of a trade war, which increased US Dollar’s safe-haven demand. However, the US Dollar retreated later when reports from the White House confirmed that the the Colombian government agreed to Trump’s terms of accepting illegal immigrants. After that, Trump put proposed tariffs on hold. This week, the major trigger for the US Dollar will be the Federal Reserve’s (Fed) monetary policy decision, which will be announced on Wednesday. The Fed is almost certain to leave interest rates unchanged in the range of 4.25%-4.50%. Investors will pay close attention to the Fed’s guidance on monetary policy and policymakers’ view on Trump’s call for immediate rate cuts. Meanwhile, the Australian Dollar (AUD) exhibits a weak performance against its major peers, with investors focusing on the Q4 inflation data, which will be released on Wednesday. As measured by the Consumer Price Index (CPI), price pressures are expected to have grown by 2.5%, compared to the same quarter of the previous year, slower than 2.8% growth in the previous quarter. Quarter-on-quarter CPI is estimated to have grown by 0.3%, faster than a 0.2% increase in the third quarter of 2024. Australian Dollar PRICE Today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.   USD EUR GBP JPY CAD AUD NZD CHF USD   -0.04% -0.14% -1.02% -0.05% 0.26% 0.17% -0.64% EUR 0.04%   -0.03% -0.84% 0.13% 0.29% 0.33% -0.50% GBP 0.14% 0.03%   -1.12% 0.16% 0.33% 0.37% -0.47% JPY 1.02% 0.84% 1.12%   1.01% 1.46% 1.42% 0.52% CAD 0.05% -0.13% -0.16% -1.01%   0.11% 0.22% -0.62% AUD -0.26% -0.29% -0.33% -1.46% -0.11%   0.07% -0.75% NZD -0.17% -0.33% -0.37% -1.42% -0.22% -0.07%   -1.05% CHF 0.64% 0.50% 0.47% -0.52% 0.62% 0.75% 1.05%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote). Soft inflation numbers would prompt expectations that the Reserve Bank of Australia (RBA) will start unwinding its policy restrictiveness from the policy meeting in February. On the contrary, hot readings would do the opposite. US Dollar FAQs What is the US Dollar? The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away. How do the decisions of the Federal Reserve impact the US Dollar? The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback. What is Quantitative Easing and how does it influence the US Dollar? In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar. What is Quantitative Tightening and how does it influence the US Dollar? Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.  

USD/JPY was a touch softer, tracking UST yields lower while BoJ MPC (last Friday) hinted at continued policy normalization. Pair was last seen at 154.05, OCBC's FX analysts Frances Cheung and Christopher Wong note. USD/JPY to trend lower for now"Japanese economic data supports BoJ policy normalization. Wage growth pressure remains intact, alongside broadening services inflation. Tokyo core CPI, PPI, wages rose while labor market report also pointed to upward wage pressure with jobless rate easing, while trade unions are calling for another 5-6% wage increase at shunto wage negotiations for 2025.""We still look for USD/JPY to trend lower, premised on Fed cut cycle while the BoJ has room to further pursue policy normalization. Bearish momentum intact while RSI fell. Consolidation likely with risks skewed to the downside. Support at 152.80 (200 DMA). Resistance at 156.90 (21 DMA), 158.80 (recent high)."

Friday's price action – particularly in GBP/USD – had all the hallmarks of a short squeeze, ING's FX analyst Chris Turner notes. GBP/USD to be trading 1.19/20 later this year"Short GBP/USD had been the conviction call for many at the start of the year given the UK's fiscal travails, but lower bond yields have taken the pressure off UK asset markets. And the (probably misplaced) prospect of a softer US tariff regime has now softened the dollar as well.""However, for UK corporates short the dollar, we see GBP/USD in the 1.25/26 area as an interesting area to consider USD hedge ratios. We think there is a good case for GBP/USD to be trading 1.19/20 later this year as the Bank of England picks up the pace of its easing cycle and the chancellor may have to come back to the table with more fiscal tightening later this year.""In terms of the UK calendar this week, Wednesday could be the most interesting. BoE Governor Andrew Bailey testifies to the Treasury Select Committee on Financial Stability. On the same day, UK Chancellor Rachel Reeves tries to shift the narrative back to the growth agenda in a speech at Oxford."

Oil prices saw their first weekly decline of the year with ICE Brent settling a little more than 2.8% lower last week. And this downward pressure has continued in early morning trading today. The tariff story has become an increasing concern for the market. This is particularly the case after the Trump administration imposed 25% tariffs on Colombia, which is set to increase to 50% in a week after Colombia refused entry to two US military planes attempting to deport illegal immigrants, ING's commodity analysts Warren Patterson and Ewa Manthey note. Sanctions don't influence Russian oil exports much"The Colombian government has retaliated with the president ordering similar tariffs of 25%. Colombia is the fourth largest supplier of crude oil to the US, exporting a little more than 200k b/d. Colombia’s key export grades are heavier crudes, and so refiners in the US Gulf Coast will either have to find alternatives or face higher costs. The USD strength following this escalation will also be providing headwinds to oil and the broader commodities complex.""Putting further pressure on oil are signs that maybe the latest US sanctions are not having a significant impact on Russian oil exports. Tanker rates appear to be coming off from their recent highs following the announcement of sanctions against Russia, suggesting that Russian oil is still flowing through the use of Russia’s shadow tanker fleet, despite a large share of this fleet being sanctioned.""The latest positioning data shows that speculators increased their net long in ICE Brent by 8,533 lots over the last reporting week to 262,865 lots as of last Tuesday. While for NYMEX WTI, speculators increased their net long by 20,195 lots to 250,887 lots as of last Tuesday – the largest position speculators have held since July."

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} Gold dips lower on Monday after a turbulent weekend on tariffs and deportations. US yields slide further as traders look for safety. Gold fades just ahead of a fresh new all-time high. Gold’s price (XAU/USD) slips below $2,760 at the time of writing on Monday after a headline-filled weekend and a busy week regarding the central bank's rate decision ahead. Over the weekend, markets understood why United States (US) President Donald Trump has eased on using tariffs as a tool. It appears that tariffs will be used as leverage, for example, for countries that refuse to accept deported US immigrants who are being brought back to their country of origin.  Columbia got a taste of the playbook on Sunday when President Trump ordered 25% emergency tariffs, and an increase to 50% in a week, as the country did not comply with President Trump’s deportation demands. However, the White House later confirmed that “Colombia has agreed to all of President Donald Trump’s terms, including unrestricted acceptance of all illegal aliens from Colombia returned from the US,” and Trump’s proposed tariffs were “now on hold.” Later this week, the Federal Reserve (Fed) and the European Central Bank (ECB) will decide on policy rates on Wednesday and Thursday, respectively. Daily digest market movers: The playbook revealedGold’s outlook remains positive on strong demand from central banks, with the precious metal’s reputation as an alternative reserve asset continuing to attract investors, according to Kotak Securities Ltd, Bloomberg reports.  Gold dipped, as the US Dollar (USD) rose after President Donald Trump held off from imposing threatened tariffs on Colombia as the two countries reached a deal on the return of deported migrants, Reuters reports.  The CME FedWatch tool projects no change in the policy rate for the upcoming Federal Reserve rate decision. Going forward, the May rate decision has a 43.8% probability of a 25 basis point rate cut compared to 45.4% for no change. Technical Analysis: Hitting the ceilingGold’s price rally stalls and looks to be hitting a curb this Monday after President Donald Trump demonstrated during the weekend how and when tariffs will be used. This was enough to trigger some panic in markets, as it became clear that President Trump is not easing at all on tariffs. Meanwhile, Gold had hit overbought levels in the Relative Strength Index (RSI) indicator in the daily chart, and could see some more selling pressure as of now.  The first line of support remains at $2,721, a sort of double top in November and December broken on January 21. Just below that, $2,709 (October 23, 2024, low) is in focus as a second nearby support. In case both abovementioned levels snap, look for a dive back to $2,680 with a full-swing sell-off.  Conversely, Gold could still hit the all-time high of $2,790, which is around 1% away from current levels. Once above that, a fresh all-time high will present itself. Meanwhile, some analysts and strategists have penciled in calls for $3,000, but $2,800 looks to be a good starting point as the next resistance on the upside. XAU/USD: Daily Chart Gold FAQs Why do people invest in Gold? Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Who buys the most Gold? Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. How is Gold correlated with other assets? Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal. What does the price of Gold depend on? The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.  

Prelim services PMI’s downside surprise was the latest driver to weigh on USD, which has been down for most of last week amid unwinding of trump trade after markets were disappointed with no immediate tariffs. Trump’s interview with Fox news last week that he can make a deal with Xi in relation to trade issues was one of the drivers to dent USD’s bullish momentum. DXY was last seen at 107.40 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note. Risks skewed to the downside"Trump also said he would rather not have to use tariffs on China. In the interim, no immediate tariff is playing a bigger role in supporting risk sentiments while also taming USD bulls. That said, tariff concerns remain to some extent, and USD dips may still find support ahead of 1 February deadline for Canada, Mexico and China. However, we cautioned that USD longs risk further liquidation if tariffs are not imposed on 1 Feb or if they are deferred. Later this week on Thursday morning (3am SGT), FOMC meeting comes into focus." "This may be a non-event with expectations for hold after 100bp cumulative cut seen over the last 3 meetings. There will not be any dot plot projection at this meeting, so focus is on Powell’s press conference. It is likely that he will keep it brief and reiterate policymaking being data dependent. For now, markets are still projecting the next 25bp cut to come in June and slightly less than 2 cuts for the year. We are looking for 3 cuts." "Daily momentum remains bearish while RSI fell. Risks skewed to the downside. Bigger support lies at 106.40 (38.2% fibo). Resistance at 107.80 (23.6% fibo retracement of Oct low to Jan high), 108.70 (21 DMA) and 109.50 levels. On the data front, 4Q GDP and core PCE will be out on Thursday, which may have more influence on USD."

The weekend saw the US successfully use the threat of import tariffs against Colombia to secure its policy aim of returning illegal immigrants. The use of tariffs as a policy lever now looks well understood by the market and perhaps will be worth decreasing marginal volatility, ING's FX analyst Chris Turner notes. DXY can drift back to the 108.50/108.80 area "The FX market is still operating off a potential 1 February deadline for tariffs against Mexico, Canada and China – and that may prevent the dollar from correcting too much further this week. Instead, focus could shift back to the macro side given a whole host of central bank rate meetings, fourth quarter GDP data and some key inflation prints around the world.""On balance, we think that Wednesday's FOMC meeting should not prove a negative event risk for the dollar in that US activity data has been pretty strong. The bigger risk to the dollar could come from Friday's release of December's core PCE inflation reading. Here, a 0.2% month-on-month reading could suggest inflation is less worrisome than some have feared and see market pricing for this year's Federal Reserve easing cycle shift to 50bp from the current 43bp.""We suspect investors are reasonably comfortable running long USD positions at the moment and would not be surprised if DXY drifted back to the 108.50/108.80 area in quiet markets. Expect lots of focus on US equity markets this week, too. A lot of the big tech stocks are releasing fourth-quarter earnings results at a time when Chinese AI firm Deepseek is starting to question whether such a huge amount of investment is required to achieve the same results. This questions the barriers to entry currently being enjoyed by the US tech stocks."

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Pound Sterling wobbles against its major peers amid deepening risks of stagflation in the UK economy.UK gilt yields tumble on firm BoE dovish bets.The risk-premium in the US Dollar has diminished as investors digest Trump’s tariff fears.The Pound Sterling (GBP) trades cautiously against its major peers at the start of the week as investors worried about the growing risks of stagflation in the United Kingdom (UK) economy. Friday’s S&P Global UK Purchasing Managers Index (PMI) report for January showed that employment levels dropped for the fourth straight month and cost pressures accelerated in the private sector, a scenario that leads to higher inflation as producers pass on the impact of higher input costs to customers. A slowdown in labor demand appears to be the outcome of Chancellor of the Exchequer Rachel Reeves’ announcement of increasing employers’ contribution to National Insurance (NI).  The first indicators of business conditions in 2025 add to the gloom about the UK economy, with companies cutting employment amid falling sales and concerns about business prospects. Inflation pressures have, meanwhile, reignited, pointing to a stagflationary environment, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said. Deteriorating job market conditions and rising price pressures are expected to add more troubles for the Bank of England (BoE), which is scheduled to announce its first monetary policy decision of 2025 on February 6. Traders are confident that the BoE will reduce interest rates by 25 basis points (bps) to 4.5%.  Meanwhile, firm BoE dovish bets have also weighed on yields on UK 30-year gilts, down over 1% to near 5.15% on Monday. Daily digest market movers: Pound Sterling recovers losses against US Dollar The Pound Sterling recovers most intraday losses and rebounds above 1.2450 against the US Dollar (USD) in Monday’s European session. The GBP/USD pair bounces back as the US Dollar retreats after investors digest fears of United States (US) President Donald Trump imposing 25% tariffs on Columbia overnight. Over the weekend, President Trump threatened to impose tariffs on its South American trading partner for not allowing military flights carrying illegal immigrants in their territory. Later, Trump put proposed tariffs on hold after Columbia accepted his terms. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, falls back to near 107.50 from an intraday high of 107.80. The Greenback lost its risk premium as market participants expected President Trump would use tariffs only to negotiate deals.  “This seems to feed into the growing sense that Trump is underdelivering on protectionism compared to pre-inauguration remarks, and that ultimately some of those tariff threats may not materialize as long as some concessions are made on trade,” said ING. Going forward, this week’s primary trigger for the US Dollar will be the Federal Reserve’s (Fed) monetary policy decision, which will be announced on Wednesday. The Fed is almost certain to keep interest rates unchanged in the range of 4.25%-4.50%. Investors will pay close attention to Fed Chair Jerome Powell’s press conference after the interest rate decision, who is expected to face the question of whether the Fed will positively react to Trump’s call for immediate rate cuts. Technical Analysis: Pound Sterling corrects from 1.2500The Pound Sterling faces selling pressure after revisiting the psychological resistance of 1.2500 against the US Dollar. However, the near-term outlook of the GBP/USD pair remains firm as it holds the 20-day Exponential Moving Average (EMA), which trades around 1.2380.  The 14-day Relative Strength Index (RSI) moves higher above 50.00 from the 20.00-40.00 range, suggesting that the bearish momentum has ended, at least for now. Looking down, the January 13 low of 1.2100 and the October 2023 low of 1.2050 will act as key support zones for the pair. On the upside, the December 30 high of 1.2607 will act as key resistance. Pound Sterling FAQs What is the Pound Sterling? The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

Recent ECB-speaks remain dovish and continued to point to measured pace of rate cut with no hint of a larger magnitude of rate cut. EUR/USD was last seen trading at 1.0485, OCBC's FX analysts Frances Cheung and Christopher Wong note. Bullish momentum on daily chart intact"Stournaras said the cuts should be in the order of 25bp each time so that by end-2025, rates is close to 2%, from the 3% that we are today. Klass said that he is comfortable with market bets for rate cuts at the next 2 meetings but not convinced yet that ECB needs to go into simulative mode." "Villeroy said it is plausible for rates to be around 2% in summer. Lagarde said that the disinflation process continues, and policymakers do not see themselves as behind the curve. ECB will maintain its measured approach to ease monetary policy. Markets expect a 25bp cut at upcoming meeting (Thursday)." "Bullish momentum on daily chart intact while RSI shows tentative signs of falling from near overbought conditions. Some pullback is not ruled out this week. Support at 1.0420/30 levels (23.6% fibo, 50 DMA), 1.0350 (21 DMA). Resistance at 1.0520, 1.0570 levels (38.2% fibo retracement of Sep high to Jan low)."

EUR/USD briefly nudged above 1.05 on Friday on news that Washington may potentially not be as aggressive on China tariffs as first thought, ING's FX analyst Chris Turner notes. Next catalysts for a move are the FOMC and ECB meetings"Euro short-dated swap rates rose on the view that the European Central Bank may not have to cut as deeply. US short-dated swap rates fell on the news that tariffs might not be as inflationary and that the Fed could ease more. Consequently, the two-year EUR:USD swap differential narrowed in close to 165bp – the tightest since early November.""We view the above as corrective, and our quarterly profile of EUR/USD gradually trending towards the 1.01 area by year-end is partially built on the assumption that the above rate differential widens back out to 200bp. Let's see.""Expect EUR/USD probably to be contained in a 1.0400-1.0500 range for the near term, with the next catalysts for a move being the FOMC and ECB meetings on Wednesday and Thursday respectively."

Gold rose close to a record high late last week after Donald Trump signalled a less aggressive approach to China, ING's commodity analysts Warren Patterson and Ewa Manthey note. Trump pushes Gold higher "In a TV interview last week Trump said he would 'rather not have to use' tariffs against China. His comments weighed on the US Dollar (USD) and lifted Gold prices higher. Although renewed USD strength this morning following escalation between the US and Colombia is providing some headwinds to Gold in early morning trading.""Trump’s softer tone towards China also pushed Copper and other base metals higher last week. Copper climbed to a two-month high above $9,300/t in Friday’s session after Trump’s comments have eased trade concerns, at least for now."

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} Silver prices (XAG/USD) fell on Monday, according to FXStreet data. Silver trades at $30.38 per troy ounce, down 0.86% from the $30.65 it cost on Friday. Silver prices have increased by 5.16% since the beginning of the year. Unit measure Silver Price Today in USD Troy Ounce 30.38 1 Gram 0.98   The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 90.93 on Monday, up from 90.42 on Friday.   Silver FAQs Why do people invest in Silver? Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets. Which factors influence Silver prices? Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices. How does industrial demand affect Silver prices? Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices. How do Silver prices react to Gold’s moves? Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver. (An automation tool was used in creating this post.)

“China will receive people who are confirmed as Chinese nationals from the mainland after verification,” Bloomberg reported, citing Chinese Foreign Ministry spokeswoman Mao Ning on Monday Mao responded when asked if Beijing would take back citizens living without documentation in the US. “The Chinese government firmly opposes any form of illegal migration,” she added.

.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a}GBP/JPY tests immediate support at 14-day EMA of 193.13, followed by the nine-day EMA at 192.92 level.The 14-day RSI dips below the 50 level, indicating that bearish momentum remains intact.The primary resistance appears at the upper boundary of the ascending channel at the 195.20 level.GBP/JPY retraces its recent gains registered in the previous session, trading around 193.30 during the European hours on Monday. An analysis of the daily chart showed the pair remains within the ascending channel pattern, indicating a potential bullish bias. Additionally, the GBP/JPY cross trades above the 9- and 14-day Exponential Moving Averages (EMAs), suggesting short-term price momentum is stronger. However, the 14-day Relative Strength Index (RSI), a key momentum indicator, pulls back below the 50 level, signaling that bearish momentum is still in play. A successful rise above the 50 mark would confirm the shift toward a bullish bias. Regarding its support, the GBP/JPY cross tests immediate 14-day EMA at 193.13, followed by the nine-day EMA at 192.92 level. Further support appears at the lower boundary of the ascending channel around the 192.70 level. A break below the ascending channel could strengthen the bearish bias, putting downward pressure on the GBP/JPY cross and potentially driving it toward the eight-week low at 189.34, recorded on January 17. On the upside, the GBP/JPY cross could retest its primary resistance at the upper boundary of the ascending channel at the 195.20 level. A break above this channel would reinforce the bullish bias and support the currency cross to approach its January high at 198.26, reached on January 7. GBP/JPY: Daily ChartEuro PRICE Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Swiss Franc.   USD EUR GBP JPY CAD AUD NZD CHF USD   0.12% 0.21% -0.39% 0.10% 0.35% 0.29% -0.35% EUR -0.12%   0.17% -0.34% 0.12% 0.24% 0.29% -0.36% GBP -0.21% -0.17%   -0.83% -0.04% 0.08% 0.14% -0.53% JPY 0.39% 0.34% 0.83%   0.53% 0.92% 0.92% 0.18% CAD -0.10% -0.12% 0.04% -0.53%   0.06% 0.19% -0.48% AUD -0.35% -0.24% -0.08% -0.92% -0.06%   0.09% -0.56% NZD -0.29% -0.29% -0.14% -0.92% -0.19% -0.09%   -0.88% CHF 0.35% 0.36% 0.53% -0.18% 0.48% 0.56% 0.88%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).  

German IFO Business Climate Index beats estimates with 85.1 in January.The IFO Current Economic Assessment Index rose to 86.1 in the reported month.The headline German IFO Business Climate Index increased to 85.1 in January from 84.7 in December. The data came in above the 84.6 forecast. Meanwhile, the Current Economic Assessment Index rose to 86.1 in the same period from 85.1 in December, beating the expected 85.4 reading. The IFO Expectations Index, which indicates firms’ projections for the next six months, eased to 84.2 in January vs. 84.4 in December and 84 anticipated. Market reaction to the German IFO Survey EUR/USD holds the recovery gains following the upbeat German IFO survey. When writing, the pair is trading 0.05% higher on the day at 1.0485.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}NZD/USD weakens as risk aversion intensifies, driven by growing support among Trump’s advisers for imposing tariffs on Mexico and Canada.Trump announced plans to impose tariffs on Colombia; however, further action was averted as Colombia later agreed to all terms.The NZD remains under pressure following the release of mixed PMI data from China, New Zealand’s close trading partner.NZD/USD has given up its recent gains from the previous two sessions, trading around 0.5680 during European hours on Monday. The risk-sensitive Kiwi pair faces challenges amid increased risk aversion as the Wall Street Journal (WSJ) reported growing momentum among Trump's advisers to impose 25% tariffs on Mexico and Canada starting February 1. Trump's advisers are adamant about not waiting for negotiations or talks. Moreover, Trump announced plans on Sunday to impose tariffs and sanctions on Colombia, following the country's refusal to allow US military planes carrying deported migrants. However, the White House announced on Monday that Colombia has agreed to all terms, easing some of the tensions. Colombia's Foreign Minister confirmed that the "impasse with the US has been overcome." The US Dollar Index (DXY), which tracks the value of the US Dollar against six major currencies, has rebounded from its monthly low of 107.22 recorded on Friday. The DXY trades near 107.70 at the time of writing. The NZD/USD pair remains under pressure following the release of mixed Chinese Purchasing Managers' Index (PMI) data. As close trade partners, China's economic performance significantly impacts New Zealand’s economy. China's NBS Manufacturing PMI dropped to 49.1 in January, down from 50.1 in December, missing market expectations of 50.1. Similarly, the NBS Non-Manufacturing PMI fell to 50.2 in January from December's 52.2 reading. The New Zealand Dollar (NZD) failed to gain support from China’s new stimulus measures aimed at promoting the development of index investment products, as part of efforts to revive the struggling equity market. The China Securities Regulatory Commission (CSRC) has approved a second round of long-term stock investment pilot programs valued at 52 billion Yuan ($7.25 billion). New Zealand Dollar FAQs What key factors drive the New Zealand Dollar? The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD. How do decisions of the RBNZ impact the New Zealand Dollar? The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair. How does economic data influence the value of the New Zealand Dollar? Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate. How does broader risk sentiment impact the New Zealand Dollar? The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}EUR/USD declines to near 1.0450 as the US Dollar strengthens on risk-aversion mood. Market sentiment turned cautious after Trump imposed tariffs on Columbia overnight.Investors will keenly focus on the Fed’s and the ECB’s policy meetings later this week.EUR/USD corrects to near 1.0450 in Monday’s European session after revisiting a six-week high near 1.0520 on Friday. The major currency pair faces pressure as the US Dollar (USD) starts the week on a positive note amid risk-off market sentiment. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, strives to recover from last week’s losses and jumps to near 107.75. The safe-haven appeal of the US Dollar has increased as United States (US) President Donald Trump's tariff fears have returned. Trump imposed 25% tariffs on its South American trading partner Columbia overnight after the country refused to accept military flights carrying deportees from the US. However, the White House later reported that the Colombian government agreed to “Trump’s terms of accepting illegal immigrants”, and Trump’s proposed tariffs were “now on hold”, Associated Press (AP) reported. The Greenback also attracts bids on Monday as market sentiment is cautious, with investors awaiting interest rate decisions from the Federal Reserve (Fed) and the European Central Bank (ECB) on Wednesday and Thursday, respectively. According to the CME FedWatch tool, the Fed is certain to keep interest rates unchanged in the range of 4.25%-4.50%. Investors will pay close attention to Fed Chair Jerome Powell’s press conference to determine whether policymakers are comfortable with Trump’s call for immediate rate cuts. On the US economic front, investors will focus this week on the Durable Goods Orders and the Personal Consumer Expenditure Price Index (PCE) data for December and the preliminary Q4 Gross Domestic Product (GDP) data. Daily digest market movers: EUR/USD declines ahead of Fed-ECB policy meetings The downside move in the EUR/USD pair at the start of the week is driven by a decent recovery in the US Dollar. Meanwhile, the Euro (EUR) trades lackluster ahead of the ECB’s monetary policy decision. The ECB is widely anticipated to reduce its Deposit Facility rate by 25 basis points (bps) to 2.75%, with the Main Refinancing Operations Rate sliding to 2.9%. This would be the fourth interest rate cut by the ECB in a row. Traders are confident that the ECB will cut interest rates on Thursday, as Eurozone inflation has remained under control and growth prospects remain sluggish. Market participants will focus on ECB President Christine Lagarde’s press conference for fresh guidance on interest rates and how the central bank will counter the consequences of Trump’s tariffs on the Eurozone. Meanwhile, investors have also priced in three more interest rate cuts this year, coming in the remaining three meetings in the first half of the year. Investors will also focus on preliminary Eurozone Q4 GDP data, which will be released on Thursday. Economists expect the shared bloc to have grown by 1% compared to the same quarter last year. In the previous quarter, the economy expanded by 0.9%. Technical Analysis: EUR/USD falls from 1.0500 while the near-term outlook remains bullishEUR/USD falls to near 1.0450 on Monday after posting a fresh monthly high near 1.0520 on Friday. The major currency pair wobbles around the 50-day Exponential Moving Average (EMA), which trades near 1.0460. The near-term outlook of the pair remains firm as it holds the 20-day EMA, which trades around 1.0383.  The pair entered a bullish reversal after breaking the January 6 high of 1.0437, which confirmed a divergence between the asset’s price and the 14-day Relative Strength Index (RSI). On January 13, the RSI formed a higher low, while the pair made lower lows. Looking down, the January 20 low of 1.0266 will be the key support zone for the pair. Conversely, the December 6 high of 1.0630 will be the key barrier for the Euro bulls. Euro FAQs What is the Euro? The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%). What is the ECB and how does it impact the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. How does inflation data impact the value of the Euro? Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money. How does economic data influence the value of the Euro? Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy. How does the Trade Balance impact the Euro? Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}EUR/GBP edges higher despite dovish bets on the ECB’s policy outlook.The ECB is widely anticipated to reduce its Deposit Facility rate by 25 basis points to 2.75% on Thursday.The British Pound could struggle as recent soft UK data have increased the dovish tone of a BoE’s policy outlook.EUR/GBP recovers its daily losses, trading near 0.8410 during early European hours on Monday. However, the EUR/GBP cross depreciated amid persistent dovish sentiment surrounding the European Central Bank (ECB) policy outlook. The ECB is expected to reduce its Deposit Facility rate by 25 basis points (bps) to 2.75% on Thursday, with further rate cuts anticipated in the next three policy meetings. Officials remain optimistic that inflation will sustainably return to the target level of 2%. On the economic data front, Friday’s report showed the HCOB Eurozone preliminary Composite Purchasing Managers' Index (PMI) for January growing after contracting in the previous two months. According to the flash report by S&P Global, overall business activity expanded, with the Composite PMI rising to 50.2 from 49.6 in November. Economists had forecast a slower decline to 49.7. Meanwhile, the Pound Sterling (GBP) has gained support following stronger-than-expected preliminary UK S&P Global/CIPS PMI data for January. The UK Composite PMI grew at a faster pace, increasing to 50.9 from 50.4 in December. Economists had predicted modest growth, with expectations at 50.0. The robust performance was driven by strength in both the services and manufacturing sectors. However, the downside for the EUR/GBP cross could slow as the British Pound could face headwinds. Recent soft UK data—including weaker inflation, retail sales, labor market figures, and sluggish GDP growth in December—has reinforced expectations of a 25 bps rate cut by the Bank of England (BoE) in February. Markets are now pricing in a near-certain reduction in the BoE’s policy rate to 4.5% at its upcoming meeting. This may cap the upside potential for the British Pound in the short term. Interest rates FAQs What are interest rates? Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation. How do interest rates impact currencies? Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money. How do interest rates influence the price of Gold? Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold. What is the Fed Funds rate? The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.  

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The European economic calendar will feature IFO sentiment data from Germany on Monday. Later in the day, Chicago Fed National Activity Index and New Home Sales data from the US will be looked upon for fresh impetus. The US Dollar (USD) benefits from the risk-averse market atmosphere early Monday. After losing more than 1.5% in the previous week, the USD Index stays in positive territory above 107.50 in the European morning. The Wall Street Journal reported that US President Donald Trump's advisers were not willing to negotiate or hold any talks with either Canada or Mexico and go ahead with 25% tariffs as soon as February 1. US Dollar PRICE Last 7 days The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the weakest against the British Pound.   USD EUR GBP JPY CAD AUD NZD CHF USD   -1.80% -2.27% -0.23% -0.60% -1.51% -1.65% -0.67% EUR 1.80%   -0.54% 1.48% 1.11% 0.35% 0.04% 1.02% GBP 2.27% 0.54%   1.98% 1.66% 0.91% 0.58% 1.57% JPY 0.23% -1.48% -1.98%   -0.36% -1.23% -1.52% -0.61% CAD 0.60% -1.11% -1.66% 0.36%   -0.86% -1.06% -0.09% AUD 1.51% -0.35% -0.91% 1.23% 0.86%   -0.40% 0.59% NZD 1.65% -0.04% -0.58% 1.52% 1.06% 0.40%   0.80% CHF 0.67% -1.02% -1.57% 0.61% 0.09% -0.59% -0.80%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote). Meanwhile, technology stocks remain under heavy pressure in premarket trading on Monday on reports of China's DeepSeek AI model outperforming Meta’s Llama 3.1, OpenAI’s GPT-4o and Anthropic’s Claude Sonnet 3.5. At the time of press, Nasdaq Futures were down nearly 2.5% on the day and S&P Futures were losing 1.4%. On Wednesday, the Federal Reserve will announce monetary policy decisions.EUR/USD rose more than 2% and closed in positive territory for the second consecutive time last week. The pair corrects lower early Monday and trades slightly above 1.0450.GBP/USD registered impressive gains on Friday and rose about 2.5% in the previous week. The pair stays under modest bearish pressure in the European morning and fluctuates near 1.2450.USD/JPY stays relatively quiet at around 156.00 on Monday. Following the Bank of Japan's (BoJ) decision to raise the policy rate by 25 basis points, the Japanese Yen struggled to gather strength against its major rivals as BoJ Governor Kazuo Ueda refrained from committing to further policy tightening in the post-meeting press conference.Gold climbed above $2,780 on Friday and came within a touching distance of a new record-high. XAU/USD edges lower to start the week but manages to hold above $2,750. Risk sentiment FAQs What do the terms"risk-on" and "risk-off" mean when referring to sentiment in financial markets? In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest. What are the key assets to track to understand risk sentiment dynamics? Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit. Which currencies strengthen when sentiment is "risk-on"? The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity. Which currencies strengthen when sentiment is "risk-off"? The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}USD/CHF gains traction to around 0.9065 in Monday’s early European session. A Trump threat of tariffs on Colombia lifts the USD. SNB’s Schlegel said it still has room to cut rates again and even take rates below 0% if inflation falls too far. The USD/CHF pair trades in positive territory near 0.9065 during the early European session. The US Dollar (USD) edges higher as traders assess the impact of US President Donald Trump's tariff plans at the start of a week. On Wednesday, the US Federal Reserve (Fed) interest rate decision will be in the spotlight.

US President Donald Trump on Sunday imposed sweeping retaliatory measures on Colombia, including tariffs and sanctions, after the South American country refused to allow two military planes carrying deported migrants to land. However, the White House said on Monday that Colombia had agreed to accept military aircraft carrying deported migrants. The prospect of high tariffs on goods from countries including China, Canada, Mexico, and the Eurozone has fueled concerns about inflation, boosting US Treasury bond yields and the Greenback. 

On the Swiss front, the ultra-dovish monetary policy guidance from the Swiss National Bank (SNB) could weigh on the Swiss Franc (CHF) and act as a tailwind for USD/CHF. The SNB Chairman Martin Schlegel said at the World Economic Forum (WEF) in Davos that the SNB “doesn’t like negative interest rates” but if we have to do it, “we will.” Meanwhile, any signs of escalating geopolitical risks in the Middle East and Russia-Ukraine conflicts could boost the safe-haven flows, benefitting the CHF.  Swiss Franc FAQs What key factors drive the Swiss Franc? The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone. Why is the Swiss Franc considered a safe-haven currency? The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in. How do decisions of the Swiss National Bank impact the Swiss Franc? The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF. How does economic data influence the value of the Swiss Franc? Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate. How does the Eurozone monetary policy affect the Swiss Franc? As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.

 

 

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According to the 4-hour chart, the bullish outlook of GBP/USD prevails as the major pair is above the key 100-period Exponential Moving Average (EMA). The upward momentum is reinforced by the Relative Strength Index (RSI), which stands above the midline around 64.70, indicating that further upside looks favorable. 

On the bright side, the immediate resistance level is seen at the 1.2500-1.2510 region, representing the psychological level and the upper boundary of the Bollinger Band. A decisive break above this level could pave the way to 1.2551, the high of January 6. The next upside barrier to watch is 1.2607, the high of December 30, 2024. 

On the downside, the crucial support level emerges at 1.2350, the 100-period EMA. A breach of the mentioned level could expose 1.2250, the lower limit of the Bollinger Band. Further south, The next contention level is located at 1.2160, the low of January 20.   GBP/USD 4-hour chartPound Sterling FAQs What is the Pound Sterling? The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}Silver price struggles as traders prepare for the upcoming Fed policy decision this Wednesday.Trump’s policies could lead the Fed to stay cautious, given that these policies are seen as inflationary.The dollar-denominated metals like Silver faces concerns about the recent rebound in the US Dollar.Silver price (XAG/USD) has retraced its gains, trading around $30.30 per troy ounce during the Asian session on Monday. The non-interest-bearing metal faces challenges with the upcoming US Federal Reserve (Fed) policy decision this week. There is widespread anticipation that the Fed will maintain current interest rates, marking the first pause in the rate-cutting cycle that began in September. The uncertainty surrounding US President Donald Trump's trade and immigration policies could prompt the Federal Reserve to remain cautious about cutting rates this year. Trump's policies are perceived as inflationary, which might lead the central bank to keep rates higher for a longer period, diminishing the appeal of Silver. Additionally, concerns about the recent rebound in the US Dollar (USD) are pressuring the precious metals including Silver. The Greenback has regained some strength amid renewed tariff concerns after Trump announced plans to impose tariffs and sanctions on Colombia, following the country's refusal to allow US military planes carrying deported migrants. However, in a surprising turn of events, the White House announced that Colombia has agreed to all terms, easing some of the tensions. Colombia's Foreign Minister confirmed that the "impasse with the US has been overcome." The Wall Street Journal (WSJ) reported growing momentum among Trump's advisers to impose 25% tariffs on Mexico and Canada starting February 1. Trump's advisers are adamant about not waiting for negotiations or talks. Silver FAQs Why do people invest in Silver? Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets. Which factors influence Silver prices? Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices. How does industrial demand affect Silver prices? Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices. How do Silver prices react to Gold’s moves? Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.  

FX option expiries for Jan 27 NY cut at 10:00 Eastern Time via DTCC can be found below. EUR/USD: EUR amounts 1.0340 810m 1.0400 1.2b 1.0460 1b 1.0500 801m USD/JPY: USD amounts                      155.00 1b 155.95 1b 156.00 1.1b AUD/USD: AUD amounts 0.6300 962m USD/CAD: USD amounts        1.4275 730m 1.4560 634m

.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a}USD/CNH rebounds from a near two-month low and draws support from a combination of factors. The disappointing Chinese PMIs undermine the CNH and act as a tailwind amid modest USD strength.The technical setup warrants caution for bullish traders and before positioning for any further gains.The USD/CNH pair attracts fresh buyers at the start of a new week and reverses a major part of Friday's slide to the 7.2345 area, or its lowest level since late November. Spot prices currently trade around the 7.265-7.270 region, up 0.35% for the day, and draw support from a combination of factors. The disappointing release of the official Chinese PMI prints earlier this Monday fueled concerns about the fragile recovery in the world's second-largest economy and weighs on the domestic currency amid trade war fears. Moreover, a goodish US Dollar (USD) bounce from a one-month low touched on Friday turns out to be another factor acting as a tailwind for the USD/CNH pair during the Asian session. From a technical perspective, last week's breakdown below the 7.3200 mark, or the 50-day Simple Moving Average (SMA), was seen as a key trigger for bearish traders. Moreover, oscillators on the daily chart are holding in negative territory and are still away from being in the oversold zone. This suggests that the path of least resistance for the USD/CNH pair is to the downside and supports prospects for the emergence of fresh selling at higher levels.  Hence, any subsequent move up could be seen as a selling opportunity and runs the risk of fizzling out quickly near the 7.3200 mark. A sustained strength beyond, however, might trigger a short-covering rally and lift the USD/CNH pair toward the next relevant hurdle near the 7.340-7.350 zone. This is closely followed by the December swing high, around the 7.370 area, which if cleared should pave the way for further gains.  On the flip side, the 7.245-7.235 area, or a nearly two-month low touched on Friday, could protect the immediate downside. A convincing break below could pave the way for a fall towards the 7.200 round figure en route to the 7.165 intermediate support and the 7.145 region. USD/CNH daily chartUS Dollar PRICE Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.   USD EUR GBP JPY CAD AUD NZD CHF USD   0.36% 0.31% 0.23% 0.18% 0.44% 0.38% 0.17% EUR -0.36%   0.02% 0.02% -0.04% 0.08% 0.14% -0.06% GBP -0.31% -0.02%   -0.31% -0.05% 0.06% 0.14% -0.09% JPY -0.23% -0.02% 0.31%   -0.00% 0.38% 0.38% 0.10% CAD -0.18% 0.04% 0.05% 0.00%   0.05% 0.19% -0.05% AUD -0.44% -0.08% -0.06% -0.38% -0.05%   0.10% -0.10% NZD -0.38% -0.14% -0.14% -0.38% -0.19% -0.10%   -0.44% CHF -0.17% 0.06% 0.09% -0.10% 0.05% 0.10% 0.44%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}AUD/JPY faces some selling pressure to around 98.10 in Monday’s Asian session, losing 0.32% on the day. The uncertainty surrounding the impact of Trump's trade and immigration policies could support the JPY. Investors await the Australian Q4 CPI inflation data on Wednesday for fresh impetus. The AUD/JPY cross attracts some sellers to near 98.10 during the Asian trading hours on Monday. The Japanese Yen (JPY) edges higher amid the safe-haven flows demand. Traders will keep an eye on Australian Consumer Price Index (CPI) inflation data for the fourth quarter, which will be released later on Wednesday. 

US President Donald Trump on Sunday imposed sweeping retaliatory measures on Colombia, including tariffs and sanctions, after the South American country refused to allow two military planes carrying deported migrants to land. However, the White House said on Monday that Colombia agreed to accept illegal migrants returned from the US. The uncertainty surrounding the impact of US President Donald Trump's trade and immigration policies could boost the JPY, a traditional safe-haven currency, and create a headwind for the cross. 

China’s factory activity unexpectedly contracted in January, reversing the growth seen in the previous three months. This, in turn, exerts some selling pressure on the China-proxy Australian Dollar (AUD) as China's economic performance significantly impacts the Australian economy. “The disappointing PMI data underscores the difficulty policymakers face in achieving a sustained recovery in growth,” Zichuan Huang, China economist at Capital Economics, said in a note.

The attention will shift to the Australian Q4 CPI data on Wednesday. In case of a softer-than-expected outcome, this could raise the bets on a February Reserve Bank of Australia (RBA) rate cut and further undermine the Aussie.  Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.  

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The US Dollar (USD) staged a modest recovery after registering its worst week since November 2023 and turned out to be a key factor undermining the commodity. That said, the fundamental backdrop seems tilted in favor of bulls and supports prospects for the emergence of some dip-buying at lower levels.  The global risk sentiment takes a hit in reaction to US President Donald Trump's decision to impose tariffs on all imports from Colombia, which revived trade war fears. Furthermore, the possibility that the Federal Reserve (Fed) would cut interest rates twice by the end of this year, along with the flight to safety, triggers a fresh leg down in the US Treasury bond yields. This, in turn, might hold back the USD bulls from placing aggressive bets and help limit any meaningful downside for the non-yielding Gold price.  Gold price is pressured by a goodish pickup in the USD demand; the downside seems limited The US Dollar, which tracks the Greenback against a basket of currencies, climbs nearly 0.25% amid reviving concerns about US President Donald Trump's trade policies and prompts some selling around the Gold price on Monday.  Trump ordered his Administration to introduce emergency 25% tariffs on all goods coming from Colombia after the Colombian government refused to allow two US military planes carrying deported migrants to land in the country. Trump warned that the tariffs will increase to 50% by next week if the Latin American country refuses to comply with his immigration policies, fueling trade war fears and tempering investors' appetite for riskier assets.  Furthermore, the Wall Street Journal (WSJ) reported that momentum is growing among Trump’s advisers to place 25% tariffs on Mexico and Canada as soon as February 1, without waiting for negotiations or talks. In the latest development, the White House confirmed on Monday that Colombia has agreed to all of Trump’s terms, including unrestricted acceptance of all illegal aliens from Colombia returned from the US. Meanwhile, Trump said last Thursday that he will demand that interest rates drop immediately, lifting bets that the Federal Reserve would lower borrowing costs further in 2025 and dragging the US Treasury bond yields lower. This could act as a headwind for the USD and help limit the downside for the XAU/USD, warranting some caution before confirming that the recent positive move witnessed over the past month or so has run out of steam. Traders now look to the US economic docket – featuring Durable Goods Orders, the Conference Board's Consumer Confidence Index and the Richmond Manufacturing Index –  for some impetus later during the US session. Gold price could attract some dip-buying near the $2,736 area amid a bullish technical setupAny subsequent slide below the $2,750-2,748 zone is likely to find support near the $2,736 area ahead of the $2,725-2,720 strong resistance breakpoint. The latter should act as a key pivotal point, which if broken might prompt some technical selling and drag the Gold price below the $2,700 mark, towards the next relevant support near the $2,665-2,662 area. On the flip side, momentum beyond the $2,772-2,773 immediate hurdle should pave the way for a move back towards the all-time peak, around the $2,790 region touched in October. Some follow-through buying, leading to a strength beyond the $2,800 mark, will be seen as a fresh trigger for bullish traders and pave the way for an extension of the positive move. Gold FAQs Why do people invest in Gold? Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Who buys the most Gold? Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. How is Gold correlated with other assets? Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal. What does the price of Gold depend on? The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.  

.fxs-related-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-related-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-related-module-related-link a{font-size:19.2px;line-height:25.92px}.fxs-related-module-related-link a{text-decoration:none;color:#1b1c23;font-weight:700;font-size:16px;font-style:normal;line-height:20px}.fxs-related-module-related-link a:hover,.fxs-related-module-related-link:hover,.fxs-related-module-related-link:hover a{color:#e4871b}.fxs-related-module-related-link a:hover{text-decoration:none}@media (min-width:680px){.fxs-related-module-title{font-size:19.2px;line-height:27.2px}.fxs-related-module-related-link a{font-size:19.2px;line-height:25.92px}} .fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} Gold prices fell in India on Monday, according to data compiled by FXStreet. The price for Gold stood at 7,655.07 Indian Rupees (INR) per gram, down compared with the INR 7,695.42 it cost on Friday. The price for Gold decreased to INR 89,289.55 per tola from INR 89,757.92 per tola on friday. Unit measure Gold Price in INR 1 Gram 7,655.07 10 Grams 76,552.96 Tola 89,289.55 Troy Ounce 238,097.90   FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly. Related newsGold Price Forecast: XAU/USD traders cash in, kicking off the Fed weekGold Weekly Forecast: Fed policy announcements to test bullish potentialGold Price Forecast: XAU/USD loses ground to near $2,765 on renewed US Dollar demandGold FAQs Why do people invest in Gold? Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Who buys the most Gold? Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. How is Gold correlated with other assets? Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal. What does the price of Gold depend on? The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up. (An automation tool was used in creating this post.)

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}WTI depreciates US President Donald Trump called on OPEC+ to reduce crude Oil prices.Trump reiterated his demand for OPEC+ to lower Oil prices to hurt Russia's finances and end the Ukraine war.The White House confirmed that Colombia has agreed to all of the terms, following the threat of trump tariffs.West Texas Intermediate (WTI) Oil price has reversed the gains made in the previous session, trading around $73.90 per barrel during Monday's Asian trading hours. Crude oil prices face pressure as US President Donald Trump sparked trade concerns, urging OPEC+ (the Organization of the Petroleum Exporting Countries and its allies) to reduce crude prices. On Friday, Trump reiterated his demand for OPEC+ to lower Oil prices in an effort to hurt the finances of Oil-rich Russia and help end the war in Ukraine. “One way to stop it quickly is for OPEC to stop making so much money and drop the price of Oil... That war will stop right away,” Trump stated. However, OPEC and its allies, including Russia, have yet to respond to Trump's call, with OPEC+ delegates pointing to a plan to increase oil output starting in April. President Trump also warned of imposing taxes, tariffs, and sanctions on Russia "and other participating countries" if a deal to end the Ukraine war is not reached soon. In response, Russian President Vladimir Putin suggested a meeting with Trump to discuss the war and energy prices. Crude supply concerns also emerged on Sunday when Trump announced plans to impose a 25% tariff on all Colombian goods entering the United States (US), with intentions to increase it to 50% within a week. This move followed Colombia's refusal to allow two US military planes, carrying deported migrants, to land. In retaliation, Colombia, a key US trading partner and Oil supplier, threatened to impose tariffs on US imports. The US is the largest buyer of Colombia’s seaborne crude exports, purchasing 183,000 barrels per day (bpd) in 2024, or 41% of Colombia’s total exports, according to data from analytics firm Kpler. Additionally, data from the US Energy Information Administration shows the US imported 228,000 bpd of crude and products from Colombia in 2023. In a surprising twist, the White House announced on Monday that “Colombia has agreed to all of President Donald Trump’s terms, including the unconditional acceptance of all illegal aliens from Colombia who are returned from the United States.” WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} In a turn of events, the White House said on Monday that “Colombia has agreed to all of President Donald Trump’s terms, including unrestricted acceptance of all illegal aliens from Colombia returned from the United States (US).” Additional takeaways Fully drafted International Emergency Economic Powers Act (IEEPA) tariffs and sanctions on Colombia will be held in reserve and not signed. Visa sanctions issued and enhanced inspections will remain in effect until the first plane of Colombian deportees is returned. Market reaction The US Dollar Index (DXY) has paused its upside on these headlines. The DXY is trading 0.20% higher on the day at 107.65 as of writing. Risk sentiment FAQs What do the terms"risk-on" and "risk-off" mean when referring to sentiment in financial markets? In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest. What are the key assets to track to understand risk sentiment dynamics? Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit. Which currencies strengthen when sentiment is "risk-on"? The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity. Which currencies strengthen when sentiment is "risk-off"? The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.  

.fxs-related-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-related-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-related-module-related-link a{font-size:19.2px;line-height:25.92px}.fxs-related-module-related-link a{text-decoration:none;color:#1b1c23;font-weight:700;font-size:16px;font-style:normal;line-height:20px}.fxs-related-module-related-link a:hover,.fxs-related-module-related-link:hover,.fxs-related-module-related-link:hover a{color:#e4871b}.fxs-related-module-related-link a:hover{text-decoration:none}@media (min-width:680px){.fxs-related-module-title{font-size:19.2px;line-height:27.2px}.fxs-related-module-related-link a{font-size:19.2px;line-height:25.92px}}USD/CAD strengthens as momentum grows among Trump’s advisers to impose 25% tariffs on Canada, potentially starting February 1.The CAD also struggles as the BoC is expected to implement another 25 basis points rate cut on WednesdayThe US Dollar gains ground amid uncertainty surrounding the impact of President Trump's policies.USD/CAD recovers its losses from the previous two sessions, trading around 1.4390 during the Asian hours on Monday. This upside of the pair is attributed to the growing momentum among US President Donald Trump’s advisers to place 25% tariffs on Mexico and Canada as soon as February 1. In a gated story, the Wall Street Journal (WSJ) reported on early Monday that Trump’s advisers do not want to wait for any negotiations or talks. An unnamed 'Senior administration official' in the report said Trump is willing to move quickly, citing the President’s imposition of tariffs on Colombia. Additionally, the Canadian Dollar (CAD) faces pressure as the Bank of Canada (BoC) is expected to implement another quarter-point rate cut on Wednesday, while the Federal Reserve is widely anticipated to hold interest rates steady through the first half of the year, further widening the interest rate differential. The US Dollar gains ground due to uncertainty surrounding the impact of US President Donald Trump's trade could support the US Federal Reserve's (Fed) cautious approach to cutting interest rates this year. The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against its six major peers, recovers from its monthly low of 107.22, reached on Friday. The DXY trades near 107.60 at the time of writing. Data released by S&P Global on Friday showed that the US Composite PMI declined to 52.4 in January from 55.4 in December. Meanwhile, the Manufacturing PMI improved to 50.1 in January versus 49.4 prior, beating the estimation of 49.6. The Services PMI dropped to 52.8 in January from 56.8 in December, below the market consensus of 56.5. Related newsUS President Trump advisers want to hit Canada, Mexico with 25% tariffs on February 1 – WSJUS Dollar Forecast: Near-term outlook hinges on the FedCAD: Tariff threat and spreads limit rebound potential – Scotiabank 

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Japanese Yen attracts some haven flows amid renewed trade war fears.The BoJ’s hawkish rate hike on Friday seems to underpin the JPY further.The narrowing US-Japan yield differential lends additional support to the JPY.The Japanese Yen (JPY) kicks off the new week on a positive note amid the global flight to safety, fueled by renewed trade war fears, and the Bank of Japan's (BoJ) hawkish interest rate hike on Friday. Adding to this, hopes that spring wage negotiations will result in strong hikes again this year and allowing the BoJ to tighten its policy further turns out to be another factor underpinning the JPY. This, in turn, dragged the USD/JPY pair back below the mid-155.00s during the Asian session and closer to a one-month low, though a modest US Dollar (USD) uptick could help limit losses.  Meanwhile, bets that the Federal Reserve (Fed) will lower borrowing costs twice this year, bolstered by US President Donald Trump's call for lower interest rates, trigger a fresh leg down in the US Treasury bond yields. The resultant narrowing of the US-Japan yield differential supports prospects for a further appreciating move for the lower-yielding JPY, suggesting that the path of least resistance for the USD/JPY pair remains to the downside. Traders now look forward to the US macro data to grab short-term opportunities later during the early North American session.  Japanese Yen draws support from a combination of factors US President Donald Trump imposed 25% tariffs on all imports from Colombia after the latter refused to allow two US military planes carrying deported migrants to land in the country.  Trump warned that the tariffs will increase to 50% by next week on further noncompliance, fueling trade war concerns and boosting demand for the traditional safe-haven Japanese Yen.  The anti-risk flow, along with Federal Reserve rate cut bets, drags the US Treasury bond yields lower, narrowing the US-Japan yield differential and lending additional support to the JPY.  The Bank of Japan decided to raise interest rates by 25 basis points, the biggest rate hike since February 2007, from 0.25% to 0.50%, or the highest since the 2008 global financial crisis.  The BoJ reiterated that it would continue to raise the policy rate and adjust the degree of monetary accommodation if the outlook presented at the January policy meeting is realized.  The BoJ does not expect consumer inflation to drop under its 2% target anytime soon and forecast slower growth, though it signaled that rising wages could fuel a ‘virtuous cycle’ of growth.  Data released on Friday showed that Japan's core consumer inflation accelerated to the fastest annual pace in 16 months during December, pointing to broadening inflationary pressure.  Annual spring wage negotiations kicked off in Japan, with the leaders of the top business lobby and labor unions agreeing on the need to maintain the momentum for pay hikes. Traders now look to Monday's US economic docket – featuring Durable Goods Orders, the Conference Board's Consumer Confidence Index and the Richmond Manufacturing Index.  USD/JPY bears await break below multi-month-old ascending channel supportFrom a technical perspective, any subsequent fall might continue to find support near the lower boundary of a multi-month-old ascending channel, currently pegged near the 155.25 region. This is closely followed by the 155.00 psychological mark and the 154.80-154.75 support, which if broken decisively will be seen as a fresh trigger for bearish traders. Given that oscillators on the daily chart have just started gaining negative traction, the USD/JPY pair might then accelerate the fall towards the 154.00 round figure en route to mid-153.00s and the 153.00 mark. On the flip side, any attempted recovery might now confront some resistance near the 156.00 mark. The next relevant hurdle is pegged near the 156.75 supply zone. Some follow-through buying, leading to subsequent strength beyond the 157.00 mark, should pave the way for a move towards the 157.55 area en route to the 158.00 mark. The USD/JPY could eventually climb to the 158.35-158.40 region before aiming to retest the multi-month peak, around the 159.00 neighborhood touched on January 10. Japanese Yen FAQs What key factors drive the Japanese Yen? The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors. How do the decisions of the Bank of Japan impact the Japanese Yen? One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen. How does the differential between Japanese and US bond yields impact the Japanese Yen? Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential. How does broader risk sentiment impact the Japanese Yen? The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.  

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Nonetheless, the renewed Greenback demand from importers, Foreign Portfolio Investors (FPIs) outflows from the Indian stock market and concerns about an economic slowdown in India could exert some selling pressure on the INR. All eyes will be on the US Federal Reserve (Fed) interest rate decision on Wednesday, with no change in rate expected. Traders will take a cue from the Press Conference about the US interest rate outlook this year.  Indian Rupee seems fragile amid global economic outlook and macroeconomic headwinds The preliminary reading of HSBC India Manufacturing Purchasing Managers Index (PMI) improved to 58.0 in January from 56.4 in December.  The Indian Services PMI eased to 56.8 in January versus 59.3 prior. The Composite PMI declined to 57.9 in January versus 59.2 prior.  “India’s manufacturing sector started the year strong, with output and new orders bouncing back from a relatively weak third fiscal quarter. The rise in new export orders was especially noticeable, and the easing of input cost inflation is also good news for manufacturers," said Pranjul Bhandari, chief India economist at HSBC. The US S&P Global Composite PMI eased to 52.4 in January from 55.4 in December.  The US S&P Global Manufacturing PMI rose to 50.1 in January from the previous reading of 49.4, stronger than the 49.6 expected. The Services PMI declined to 52.8 in January versus 56.8 prior, below the market consensus of 56.5. The US Existing Home Sales rose by 2.2% MoM in December, from 4.15 million to 4.24 million. USD/INR paints a positive picture in the longer term The Indian Rupee trades in negative territory on the day. The constructive view of the USD/INR pair remains intact as the pair has traded within the descending triangle pattern and is well-supported above the key 100-day Exponential Moving Average (EMA) on the daily chart. Additionally, the 14-day Relative Strength Index (RSI) stands above the midline near 58.35, suggesting that the uptrend is more likely to resume than to reverse.

The crucial upside barrier for USD/INR emerges at an all-time high of 86.69. A bullish breakout above this level could see a rally to the 87.00 psychological mark.

On the flip side, the initial support level is seen at 86.14, the low of January 24. Any follow-through selling below the mentioned level could see a drop to the next bearish targets at 85.85, the low of January 10, en route to 85.65, the low of January 7.  Indian Rupee FAQs What are the key factors driving the Indian Rupee? The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee. How do the decisions of the Reserve Bank of India impact the Indian Rupee? The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference. What macroeconomic factors influence the value of the Indian Rupee? Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee. How does inflation impact the Indian Rupee? Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
 

.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a} .fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Australian Dollar holds losses following the mixed Chinese Purchasing Managers' Index data release.The China Securities Regulatory Commission has approved a second round of long-term stock investment pilot programs valued at $7.25 billion.The USD strengthens amid uncertainty surrounding the impact of US President Donald Trump's trade and immigration policies.The Australian Dollar (AUD) ends its three-day winning streak against the US Dollar (USD), with the AUD/USD pair trading subdued following the release of mixed Chinese Purchasing Managers' Index (PMI) data on Monday. As close trade partners, China's economic performance significantly impacts the Australian economy. China's NBS Manufacturing PMI fell to 49.1 in January, down from 50.1 in December, missing the market expectation of 50.1. Similarly, the NBS Non-Manufacturing PMI declined to 50.2 in January compared to December's 52.2 reading. The Australian Dollar also failed to gain support from China’s fresh stimulus measures to promote its development of index investment products, its latest effort to revive the ailing equity market. The China Securities Regulatory Commission (CSRC) has approved a second round of long-term stock investment pilot programs valued at 52 billion Yuan ($7.25 billion). China’s Industrial Profits declined by 3.3% year-over-year to CNY 7,431.05 billion in 2024, easing from the 4.7% drop recorded in the first 11 months of the year. This marks the third consecutive year of contraction, following a 2.3% decline in 2023. The continued downturn reflects ongoing economic challenges, including weak demand, rising deflationary pressures, and a prolonged slump in the property sector. Australian Dollar declines due to increased risk aversion regarding Trump’s policies The US Dollar Index (DXY), which tracks the value of the US Dollar against six major currencies, has rebounded from its monthly low of 107.22 recorded on Friday. The DXY trades near 107.60 at the time of writing. The USD gains strength amid uncertainty regarding the impact of US President Donald Trump's trade and immigration policies. This backdrop may encourage the Federal Reserve (Fed) to maintain a cautious stance on cutting interest rates this year. According to S&P Global data released on Friday, the US Composite PMI fell to 52.4 in January from 55.4 in December. The Manufacturing PMI rose to 50.1 in January, surpassing the previous reading of 49.4 and exceeding the forecast of 49.6. However, the Services PMI dropped to 52.8 in January from 56.8 in December, falling short of the expected 56.5. However, Trump said on Thursday that he wants the Fed to cut interest rates immediately. "With oil prices going down, I'll demand that interest rates drop immediately, and likewise they should be dropping all over the world," said Trump at the World Economic Forum in Davos, Switzerland. The US Dollar faced challenges as Trump's remarks came before the Federal Reserve's (Fed) monetary policy meeting scheduled for January 28 and 29, with expectations the US central bank will hold rates steady. Traders expect the Fed to keep its benchmark overnight rate steady in the 4.25%-4.50% range at its January meeting. Moreover, Trump’s policies could drive inflationary pressures, potentially limiting the Fed to just one more rate cut. President Trump has imposed an emergency 25% tariff on all Colombian goods entering the United States (US), with plans to raise it to 50% within a week. The move comes after Colombia refused to permit two US military planes carrying deported migrants to land. A White House official, speaking to Reuters on Sunday, stated that the measure was intended to serve as a warning to other nations about the consequences of rejecting deportation flights. Australia’s Judo Bank’s Composite Purchasing Managers Index (PMI) edged higher to 50.3 in January, up from 50.2 in December. Meanwhile, Manufacturing PMI climbed to 49.8 in January from 47.8 in December, the highest reading in 12 months, breaking a streak of 13 consecutive months of contraction. However, the Services PMI dipped to 50.4 from 50.8, hitting a six-month low and indicating a slowdown in the sector's growth. President Trump expressed optimism, stating that he "would rather not have to use tariffs on China" and is hopeful about reaching a deal. Trump's remarks came after his conversation with China’s President Xi Jinping on Thursday, hinting at potential progress in US-China trade negotiations. Chinese authorities introduced several measures on Thursday to stabilize its stock markets, including allowing pension funds to increase investments in domestic equities. A pilot scheme enabling insurers to purchase equities will be launched in the first half of 2025, with an initial scale of at least 100 billion Yuan. Meanwhile, the People’s Bank of China (PBoC) said that they “will expand the scope and increase the scale of liquidity tools to fund share purchases at the proper time.” Technical Analysis: Australian Dollar could retest ascending channel’s upper boundary at 0.6350 The AUD/USD pair trades near 0.6290 on Monday, showing upward movement within an ascending channel on the daily chart, hinting at a potential bullish bias. The 14-day Relative Strength Index (RSI) remains slightly above 50, supporting positive market sentiment. On the upside, the AUD/USD pair could retest the key psychological resistance at 0.6300, with the next target near the channel's upper boundary around 0.6350. Initial support is located at the nine-day Exponential Moving Average (EMA) of 0.6265, followed by the 14-day EMA at 0.6254. A stronger support lies near the channel's lower boundary around 0.6240. AUD/USD: Daily ChartAustralian Dollar PRICE Today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Japanese Yen.   USD EUR GBP JPY CAD AUD NZD CHF USD   0.33% 0.29% -0.02% 0.21% 0.49% 0.47% 0.16% EUR -0.33%   0.03% -0.20% 0.02% 0.16% 0.26% -0.06% GBP -0.29% -0.03%   -0.54% -0.00% 0.13% 0.25% -0.09% JPY 0.02% 0.20% 0.54%   0.26% 0.67% 0.72% 0.32% CAD -0.21% -0.02% 0.00% -0.26%   0.07% 0.26% -0.08% AUD -0.49% -0.16% -0.13% -0.67% -0.07%   0.14% -0.18% NZD -0.47% -0.26% -0.25% -0.72% -0.26% -0.14%   -0.55% CHF -0.16% 0.06% 0.09% -0.32% 0.08% 0.18% 0.55%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote). Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.  

.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a} In a gated story, the Wall Street Journal (WSJ) reported on early Monday that “momentum is growing among US President Trump’s advisers to place 25% tariffs on Mexico and Canada as soon as February 1. The advisers do not want to wait for any negotiations or talks. An unnamed 'Senior administration official' in the report said Trump is willing to move quickly, citing the President’s imposition of tariffs on Colombia. Additional takeaways “Trump views tariffs as an “effective negotiating tool” and “effective punishment” for nations that don’t hew to his agenda.” “The President remains “very serious” about his threats to Mexico and Canada and expects them to cooperate.” Market reaction At the time of writing, the Canadian Dollar (CAD) is testing intraday lows against the US Dollar (USD), with USD/CAD trading 0.24% higher on the day near 1.4400. Canadian Dollar PRICE Today The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the weakest against the Japanese Yen.   USD EUR GBP JPY CAD AUD NZD CHF USD   0.33% 0.30% -0.03% 0.24% 0.48% 0.48% 0.17% EUR -0.33%   0.04% -0.20% 0.05% 0.16% 0.31% -0.05% GBP -0.30% -0.04%   -0.56% 0.01% 0.12% 0.26% -0.09% JPY 0.03% 0.20% 0.56%   0.30% 0.68% 0.74% 0.34% CAD -0.24% -0.05% -0.01% -0.30%   0.04% 0.24% -0.10% AUD -0.48% -0.16% -0.12% -0.68% -0.04%   0.16% -0.17% NZD -0.48% -0.31% -0.26% -0.74% -0.24% -0.16%   -0.56% CHF -0.17% 0.05% 0.09% -0.34% 0.10% 0.17% 0.56%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} China’s Manufacturing Purchasing Managers' Index (PMI) contracted to 49.1 in January from 50.1 in December, the official data released by the National Bureau of Statistics (NBS) showed on Monday. The reading came in below the market forecast of 50.1 in the reported month.  The NBS Non-Manufacturing PMI dropped to 50.2 in January versus December’s 52.2 print. Market reaction At the time of writing, the AUD/USD pair is trading just below 0.6300, losing 0.14% on the day.  Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}EUR/USD depreciates as the US Dollar Index rebounds from its monthly low at 107.22.The US Dollar receives support from uncertainty surrounding the impact of US President Donald Trump's policies.The Euro struggles as the ECB could cut its Deposit Facility rate by 25 basis points on Thursday.EUR/USD edges lower to near 1.0480 during the Asian session on Monday as the US Dollar Index (DXY), which measures the value of the US Dollar (USD) against its six major peers, recovers from its monthly low at 107.22, reached on Friday. The DXY trades near 107.60 at the time of writing. The US Dollar gains ground following the mixed US Purchasing Managers' Index (PMI) data. The uncertainty surrounding the impact of US President Donald Trump's trade and immigration policies could support the US Federal Reserve's (Fed) cautious approach to cutting interest rates this year. Data released by S&P Global on Friday showed that the US Composite PMI declined to 52.4 in January from 55.4 in December. Meanwhile, the Manufacturing PMI improved to 50.1 in January versus 49.4 prior, beating the estimation of 49.6. The Services PMI dropped to 52.8 in January from 56.8 in December, below the market consensus of 56.5. However, the EUR/USD appreciated as the Euro received support as the HCOB Eurozone preliminary Composite Purchasing Managers' Index (PMI) grew in January after shrinking in the last two months. Flash HCOB PMI report, compiled by S&P Global, showed that overall business activity expanded. The Composite PMI rose to 50.2 from 49.6 in November. Economists expected the PMI to continue to decline but at a slower pace to 49.7. However, the Euro struggles due to dovish sentiment surrounding th European Central Bank’s (ECB) policy outlook. The ECB is all set to cut its Deposit Facility rate by 25 basis points (bps) to 2.75% on Thursday and will continue to follow the process in the next three policy meetings as officials are confident that inflationary pressures will sustainably return to the desired rate of 2%. Euro FAQs What is the Euro? The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%). What is the ECB and how does it impact the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. How does inflation data impact the value of the Euro? Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money. How does economic data influence the value of the Euro? Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy. How does the Trade Balance impact the Euro? Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}NZD/USD softens to around 0.5690 in Monday’s Asian session. The uncertainty surrounding Trump’s tariff policies weighs on the New Zealand Dollar. The dovish expectation of the RBNZ might drag the NZD lower against the USD. The NZD/USD pair remains under selling pressure near 0.5690 during the Asian trading hours on Monday. The New Zealand Dollar (NZD) weakens amid the cautious mood and uncertainty over US President Donald Trump’s tariff measures. Traders await the US Federal Reserve (Fed) interest rate decision scheduled for Wednesday. 

The Greenback has edged higher after Trump announced on Sunday to impose a 25% tariff on all Colombian goods coming into the US, which will be raised to 50% in a week. Investors will closely monitor the development surrounding Trump’s tariff policies on China, as China is a major trading partner to New Zealand. Last week, Trump signaled that the nation could reach a deal with China without using tariffs.

The Fed is expected to keep interest rates on hold at its January meeting on Wednesday, but market players will keep an eye on the US rate path this year, especially after Trump demanded the Fed continue lowering borrowing costs. With so much uncertainty, "we expect (the Fed) to retain maximal optionality" to resume cuts in March or continue a pause, said Bank of America analyst Mark Cabana

On the other hand, the softer New Zealand's Consumer Price Index (CPI) inflation data for the fourth quarter of 2024 raised the bets that the Reserve Bank of New Zealand (RBNZ) will deliver further rate cuts, which might weigh on the Kiwi. Swaps markets are now pricing in nearly 90% odds of another 50 basis points (bps) reduction on February 19, adding to the two delivered earlier in the cycle. The New Zealand central bank is anticipated to deliver a total of 100 bps of rate cuts for the remainder of 2025. New Zealand Dollar FAQs What key factors drive the New Zealand Dollar? The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD. How do decisions of the RBNZ impact the New Zealand Dollar? The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair. How does economic data influence the value of the New Zealand Dollar? Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate. How does broader risk sentiment impact the New Zealand Dollar? The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}GBP/USD edges lower on Monday amid the emergence of some US Dollar buying.Trump’s tariffs on Columbia revive trade war fears and boost the safe-haven USD.Fed rate cut bets, sliding US bond yields cap the buck and lend support to the pair.The GBP/USD pair kicks off the new week on a softer note and erodes a part of Friday's strong gains to the 1.2500 psychological mark, or a near three-week peak. Spot prices currently trade around the 1.2460 region, down 0.20% for the day amid a modest US Dollar (USD) strength, though the downtick lacks any follow-through selling or bearish conviction.  The USD Index (DXY), which tracks the Greenback against a basket of currencies, rebounds from over a one-month low amid the flight to safety, triggered by US President Donald Trump's decision to impose import duties on Colombia. Trump imposed a 25% tariff on all imports from Colombia after the latter refused to allow two US military planes carrying deported migrants to land in the country. Trump also warned that the tariffs will increase to 50% by next week on further noncompliance, fueling concerns about global trade wars and tempering investors’ appetite for riskier assets.  Any meaningful USD appreciation, however, seems elusive in the wake of rising bets that the Federal Reserve (Fed) will lower borrowing costs twice by the end of this year amid signs of abating inflationary pressures in the US. The expectations were further lifted by Trump's comments last Thursday, saying that he will demand that interest rates drop immediately. This leads to a fresh leg down in the US Treasury bond yields, which should keep a lid on further USD gains. Moreover, the uncertainty over the prospects for a Bank of England (BoE) rate cut in February helps limit losses for the GBP/USD pair.  Market participants now look forward to the BoE's Quarterly Bulletin for some impetus ahead of the US macro data. Monday's US economic docket features the release of Durable Goods Orders, the Conference Board's Consumer Confidence Index and the Richmond Manufacturing Index. This, along with the broader risk sentiment and the US bond yields, might influence the USD price dynamics and produce short-term trading opportunities around the GBP/USD pair. Pound Sterling FAQs What is the Pound Sterling? The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} On Monday, the People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 7.1698 as compared to Friday's fix of 7.1705 and 7.2295 Reuters estimates. PBOC FAQs What does the People's Bank of China do? The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market. Who owns the PBoC? The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts. What are the main policy tools used by the PBoC? Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi. Are private banks allowed in China? Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}Gold price drifts lower to near $2,765 in Monday’s early Asian session. Trump imposed 25% tariffs on Colombia as deported migrant flights were denied, lifting the USD. The Fed is expected to leave rates unchanged on Wednesday. Gold price (XAU/USD) edges lower to around $2,765 during the early Asian session on Monday, pressured by the renewed US Dollar (USD) demand. However, the potential downside for the precious metal might be limited amid the cautious mood and uncertainty surrounding tariff measures by US President Donald Trump. 

The Greenback strengthens as Trump kicks off a trade war with tariffs. On Sunday, Trump imposed sweeping retaliatory measures on Colombia, including tariffs and sanctions, after the South American country refused to allow two military planes carrying deported migrants to land. Trump said that he will order an emergency 25% tariff on all Colombian goods coming into the US, which will be raised to 50% in a week. This headline weighs on the USD-denominated commodity price. 

Gold traders expect the US Federal Reserve (Fed) to hold interest rates steady at its January meeting on Wednesday. The FOMC Press Conference will be closely watched as it might offer some hints about the US rate path. At the World Economic Forum last week, Trump called for an immediate interest rate cut, causing the USD to hit its lowest level in over a month and supporting the Gold price. However, if the Fed officials deliver hawkish remarks this week, this might drag the non-yielding yellow metal lower.  Gold FAQs Why do people invest in Gold? Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Who buys the most Gold? Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. How is Gold correlated with other assets? Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal. What does the price of Gold depend on? The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} On Sunday, US President Donald Trump imposed sweeping retaliatory measures on Colombia, including tariffs and sanctions, after the South American country refused to allow two military planes carrying deported migrants to land as part of the new US administration's immigration crackdown.

Trump said that he will order an emergency 25% tariff on all Colombian goods coming into the US, which will be raised to 50% in a week.   Trump was using Colombia to warn other countries about the consequences of rejecting deportation flights, a White House official told Reuters on Sunday. Market reaction At the press time, the US Dollar Index (DXY) is up 0.17% on the day to trade at 107.63.  US Dollar FAQs What is the US Dollar? The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away. How do the decisions of the Federal Reserve impact the US Dollar? The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback. What is Quantitative Easing and how does it influence the US Dollar? In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar. What is Quantitative Tightening and how does it influence the US Dollar? Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}AUD/USD softens to around 0.6300 in Monday’s early Asian session, down 0.19% on the day. US S&P Global Manufacturing PMI rose to 50.1 in January; Services PMI declined to 52.8. China announced new measures to promote equity index investments on Sunday. The AUD/USD pair weakens to near 0.6300, snapping the three-day winning streak during the early Asian session on Monday. China’s fresh stimulus measures to promote its development of index investment products fail to boost the China-proxy Australian Dollar (AUD). Traders brace for the release of Chinese NBS Purchasing Managers Index (PMI) data, which are due later on Monday. 

Data released by S&P Global on Friday showed that the US Composite PMI declined to 52.4 in January from 55.4 in December. Meanwhile, the Manufacturing PMI improved to 50.1 in January versus 49.4 prior, beating the estimation of 49.6. The Services PMI dropped to 52.8 in January from 56.8 in December, below the market consensus of 56.5. 

The mixed US PMI reports and uncertainty surrounding the impact of US President Donald Trump's trade and immigration policies could support the US Federal Reserve's (Fed) cautious approach to cutting interest rates this year. This, in turn, could lift the US Dollar (USD) and create a headwind for the pair. 

On the Aussie front, Chinese authorities on Sunday announced new measures to boost the development of index investment products, its latest effort to revive the ailing equity market. This action aims to achieve a significant increase in the scale and proportion of index investment in the capital market through efforts over a period of time. However, this headline fails to support the China-proxy Aussie as traders remain cautious ahead of the Chinese PMI data. 

On Wednesday, the Australian Consumer Price Index (CPI) for the fourth quarter will be in the spotlight. This report could offer some hints about the Reserve Bank of Australia (RBA) rate path. Any signs of softer inflation could raise the bets on a February RBA rate reduction and signal a more dovish RBA rate path, which could weigh on the AUD in the near term.  Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

 

 

 

 

On Sunday, China announced new measures to boost the development of index investment products, its latest effort to revive the ailing equity market, per Bloomberg.

The China Securities Regulatory Commission (CSRC) stated that the government aims to achieve a significant increase in the scale and proportion of index investment in the capital market through efforts over a period of time.   Market reaction  At the press time, the AUD/USD pair is down 0.13% on the day to trade at 0.6303.