Forex Today: US Dollar regains ground, eyes on US Retail Sales, PPI data
Here is what you need to know on Wednesday, January 14:
The US Dollar (USD) recovers some lost ground against its major counterparts on Wednesday, bolstered by US Consumer Price Index (CPI) inflation data that firms up expectations that the Federal Reserve (Fed) will remain on hold later this month.
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 | -0.00% | -0.04% | 0.13% | 0.03% | -0.21% | -0.07% | 0.03% | |
| EUR | 0.00% | -0.04% | 0.13% | 0.04% | -0.21% | -0.08% | 0.03% | |
| GBP | 0.04% | 0.04% | 0.17% | 0.07% | -0.18% | -0.04% | 0.07% | |
| JPY | -0.13% | -0.13% | -0.17% | -0.09% | -0.33% | -0.21% | -0.09% | |
| CAD | -0.03% | -0.04% | -0.07% | 0.09% | -0.24% | -0.12% | -0.00% | |
| AUD | 0.21% | 0.21% | 0.18% | 0.33% | 0.24% | 0.13% | 0.24% | |
| NZD | 0.07% | 0.08% | 0.04% | 0.21% | 0.12% | -0.13% | 0.11% | |
| CHF | -0.03% | -0.03% | -0.07% | 0.09% | 0.00% | -0.24% | -0.11% |
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).
Following the recent US CPI inflation data for December, Fed funds futures traders' pricing showed that an interest rate cut is not seen as likely until June.
Traders will keep an eye on the release of the US Retail Sales and Producer Price Index (PPI) reports later on Wednesday. The US Retail Sales are expected to see an increase of 0.4% MoM in November. Meanwhile, the headline and core PPI are estimated to see a rise of 2.7% YoY in November.
Unprecedented pressure from the White House to lower interest rates raises concerns over the Fed’s independence. Fed Chair Jerome Powell said on Sunday that the Fed has received subpoenas from the Justice Department over statements he made to Congress last summer on cost overruns for a $2.5 billion building renovation project at the central bank's headquarters in Washington. Powell called the threats a "pretext" for putting pressure on the US central bank to cut the interest rates.
Traders will closely monitor the latest geopolitical developments surrounding the Iranian civil unrest. US President Donald Trump canceled all meetings with Iranian officials and promised protesters that help is on the way. Trump has frequently threatened to intervene if the Iranian government kills protestors.
AUD/USD attracts some buyers near 0.6700 amid hawkish expectations surrounding the Reserve Bank of Australia’s (RBA) rate outlook. Additionally, China posted a trade surplus of $114.10B in December, defying the renewed tariff pressures from Trump. China’s Exports grew by 6.6% in value terms year-on-year in December, beating the market expectations of a 3% increase.
USD/JPY rises to the highest levels since July 2024, around 159.30, on reports that Japanese Prime Minister Sanae Takaichi may call a snap election on February 8 to consolidate her power. Bank of Japan (BoJ) Governor Ueda said on Wednesday that the central bank will continue to raise interest rates if economic and price development are in line with the forecast, and wages and prices rise moderately.
EUR/USD trades on a flat note below 1.1650 amid a data-empty European calendar, while GBP/USD holds steady around 1.3435. Traders brace for the UK Gross Domestic Product (GDP) report for November, which is due on Thursday. The Harmonized Index of Consumer Prices (HICP) from Germany will be published on Friday.
Gold holds positive ground near a record high above $4,625 as traders pile into safe-haven metals amid geopolitical and economic uncertainties. Silver rises more than 3.65% to set a new all-time high of $91.57 in Wednesday’s early European session.
WTI edges lower to $60.70 as Venezuela resumes exports and the American Petroleum Institute (API) shows a big build in US crude inventories. Heightened concerns surrounding Iran and potential supply disruptions will be closely watched.
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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