Forex Today: US Dollar holds as markets eye FOMC Minutes, UK CPI and US PCE
Here is what you need to know for Tuesday, February 17:
Major currency pairs traded little changed on Monday as stock and bond markets in the United States (US) remained closed due to the Presidents' Day holiday. In the coming days, the economic agenda will intensify with jobs and inflation reports in the United Kingdom (UK) and the US Personal Consumption Expenditures (PCE) price index in the US.
On the geopolitical front, Iranian Foreign Minister Abbas Araghchi arrived in Geneva for a high-stakes second round of nuclear talks with the US aimed at reducing tensions and averting a new military confrontation that Iran’s Supreme Leader Ayatollah Ali Khamenei has warned could turn into a regional conflict.
The US Dollar Index (DXY) is trading near the 97.10 level, seeing little upward movement throughout the day, even though US markets remained closed during the American session.
US 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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.19% | 0.18% | 0.49% | 0.13% | 0.00% | 0.14% | 0.21% | |
| EUR | -0.19% | -0.00% | 0.33% | -0.06% | -0.18% | -0.04% | 0.03% | |
| GBP | -0.18% | 0.00% | 0.29% | -0.05% | -0.18% | -0.04% | 0.03% | |
| JPY | -0.49% | -0.33% | -0.29% | -0.36% | -0.48% | -0.34% | -0.28% | |
| CAD | -0.13% | 0.06% | 0.05% | 0.36% | -0.12% | 0.02% | 0.08% | |
| AUD | -0.01% | 0.18% | 0.18% | 0.48% | 0.12% | 0.13% | 0.20% | |
| NZD | -0.14% | 0.04% | 0.04% | 0.34% | -0.02% | -0.13% | 0.07% | |
| CHF | -0.21% | -0.03% | -0.03% | 0.28% | -0.08% | -0.20% | -0.07% |
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).
EUR/USD is trading near the 1.1850 price region. The pair declined on Monday, following further upside momentum in the US Dollar (USD), as investors continue to gauge the latest US Consumer Price Index (CPI) prints released on Friday and gear up for key US data and the FOMC Minutes, due later in the week.
USD/JPY is trading near the 153.50 price region, posting solid gains at the start of the week following last week's strength of the Japanese Yen (JPY) after Japanese Prime Minister Sanae Takaichi’s election victory.
AUD/USD is trading unchanged near 0.7070, as investors continue to assess the likelihood of further Federal Reserve (Fed) rate cuts.
GBP/USD is trading near the 1.3630 price zone, seeing downward traction throughout the day. Political turmoil in the United Kingdom eased as the Labour Party supported the British PM Keir Starmer, who last week pledged to stay in his job.
USD/CAD is trading near the 1.3630 price zone, trading on the green side for the fourth consecutive session as market focus shifts to Canada’s January inflation data due on Tuesday.
Gold is trading near the $4,991 price zone, losing some ground as markets await the release of big data later this week.
What's next in the docket:
Tuesday, February 17:
- RBA Meeting Minutes.
- Germany January Harmonized Index of Consumer Prices.
- UK January Claimant Count Change.
- December UK Employment Change.
- UK December ILO Unemployment Rate.
- Canadian January CPI.
Wednesday, February 18:
- RBNZ Interest Rate Decision.
- January UK CPI.
- US Federal Open Market Committee Minutes.
Thursday, February 19:
- Australian January Employment Change.
- Australian Unemployment Rate.
Friday, February 20:
- UK January Retail Sales.
- Germany February flash HCOB Composite PMIs
- Eurozone PMIs
- UK flash February S&P Global PMIs.
- US December Core Personal Consumption Expenditures.
- February US S&P Global PMIs.
Gold FAQs
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.
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.
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.
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.
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