Forex Today: Markets turn cautious ahead of next batch of US data
Here is what you need to know on Thursday, January 8:
The market mood sours early Thursday and investors adopt a cautious stance. The European economic calendar will feature business and consumer sentiment data, alongsinde Eurozone Producer Price Index (PPI) figures for November. In the second half of the day, weekly Initial Jobless Claims, October Trade Balance and Unit Labor Costs data for the third quarter from the US will be watched closely by market participants.
On Wednesday, the data from the US showed that the business activity in the service sector continued to expand at an accelerating pace in December, with the Institute for Supply Management (ISM) Services Purchasing Managers' Index (PMI) rising to 54.4 from 52.6 in November. The Employment Index of the PMI survey rose to 52 from 48.9 in this period, reflecting an increase in the sector's payrolls. In the meantime, the US Bureau of Labor Statistics reported that JOLTS Job Openings declined to 7.14 million in November from 7.44 million in October. The US Dollar (USD) Index benefited from the upbeat PMI data and closed in positive territory for the second consecutive day. Early Thursday, the USD Index stays flat on the day near 98.70, while US stock index futures lose between 0.3% and 0.6%.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.40% | 0.11% | -0.13% | 0.94% | -0.29% | 0.11% | 0.66% | |
| EUR | -0.40% | -0.30% | -0.46% | 0.53% | -0.70% | -0.29% | 0.26% | |
| GBP | -0.11% | 0.30% | -0.27% | 0.84% | -0.39% | 0.01% | 0.56% | |
| JPY | 0.13% | 0.46% | 0.27% | 1.03% | -0.20% | 0.21% | 0.81% | |
| CAD | -0.94% | -0.53% | -0.84% | -1.03% | -1.07% | -0.81% | -0.27% | |
| AUD | 0.29% | 0.70% | 0.39% | 0.20% | 1.07% | 0.41% | 0.96% | |
| NZD | -0.11% | 0.29% | -0.01% | -0.21% | 0.81% | -0.41% | 0.55% | |
| CHF | -0.66% | -0.26% | -0.56% | -0.81% | 0.27% | -0.96% | -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 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).
US Secretary of State Marco Rubio said late Wednesday that he will meet with officials from Denmark and Greenland next week, Reuters reported on Thursday. This comes after the US President Donald Trump doubled down on his intention to take over Greenland, a self-governing territory of Denmark.
Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser said on Thursday that the November Consumer Price Index (CPI) was largely as expected and added added that the interest rate cuts are unlikely anytime soon. After reaching its highest level since October 2025 above 0.6760 on Wednesday, AUD/USD reversed its direction and closed the day in negative territory, pressured by the broad-based USD strength. The pair extends its correction despite these hawkish comments and trades near 0.6700, losing more than 0.3% on the day.
The latest report released by the Bank of Japan (BoJ) for January indicated that the central bank made no changes to any of their economic assessments of the nine Japanese regions covered. Most regions stated that regional economies were "recovering moderately" or "picking up moderately." After posting marginal gains on Wednesday, USD/JPY stays in a consolidation phase, slightly above 156.50, early Thursday.
Following the decisive rally seen earlier in the week, Gold staged a correction and lost more than 0.8% on Wednesday. XAU/USD struggles to benefit from the risk-averse market atmosphere and trades in the red below $4,440 in the European morning.
EUR/USD registered small losses on Wednesday and entered a consolidation phase below 1.1700 early Thursday. The data from Germany showed that Factory Orders grew by 5.6% on a monthly basis in November. This print followed the 1.6% increase recorded in October and came in much better than the market expectation for a decrease of 1%, supporting the Euro.
GBP/USD stays on the back foot and trades near 1.3450 after losing about 0.3% on Wednesday.
Risk sentiment FAQs
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.
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.
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.
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.
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