Forex Today: Markets now look at further US data, Fed rate cut bets

Source Fxstreet

The selling pressure remained well in place around the Greenback, which saw its weekly corrective decline gather extra pace after US inflation tracked by the CPI matched market consensus in December. The door for a rate cut in January appears still open.

Here is what you need to know on Thursday, January 16:

The US Dollar Index (DXY) dropped to new five-day lows after breaking below the 109.00 support, as investors seem to have placed some hopes on a Fed rate cut later in the month. Retail Sales and weekly Initial Jobless Claims take centre stage, seconded by Import/Export Prices, the Philly Fed Manufacturing Index, Business Inventories, and the NAHB Housing Market index.

EUR/USD broke above the 1.0300 hurdle with certain conviction in response to initial USD-selling, although this move lost traction afterwards, leaving the pair with modest losses for the day. The final Inflation Rate in Germany is due along with EMU’s Balance of Trade results and the ECB Accounts.

GBP/USD advanced for the third consecutive day on Wednesday, managing to briefly trespass 1.2300 the figure following another negative day in the Greenback. An interesting UK docket on Thursday will include GDP figures, Industrial and Manufacturing Production, Construction Output, and Balance of Trade.

USD/JPY retreated heavily to four-week lows in the sub-156.00 region following the marked pullback in the Dollar and diminishing US yields across the curve. Japan’s Producer Prices will be at the centre of the debate.

Another positive day for the risk complex saw AUD/USD advance to six-day highs near 0.6250. The main focus in Oz will be on the release of the Australian labour market report.

Prices of WTI resumed their uptrend and traded at shouting distance from recent peaks just above the $79.00 mark per barrel.

Prices of Gold traded in a constructive fashion following the Dollar’s pullback and the marked retracement in US yields across different time frames, with the ounce troy hovering around the $2,700 mark on Wednesday. Silver prices added to Tuesday’s gains and climbed beyond the key $30.00 mark per ounce.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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Gold ends three-week slide at the $4,400 line — eight straight days of ETF inflows vs a 5% 10-year and a 100 dollarSpot gold closed Friday at $4,378.39, up 0.84% on the day and about 0.8% for the week — its first weekly gain in four weeks — with the intraday high of $4,399.67 leaving it 33 cents shy of the $4,400 line. Gold ETFs have now logged eight straight sessions of inflows, but with the 10-year back above 5% and the dollar index near 100, here is what decides whether this is a reversal or a bounce.
Author  Suzie
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Spot gold closed Friday at $4,378.39, up 0.84% on the day and about 0.8% for the week — its first weekly gain in four weeks — with the intraday high of $4,399.67 leaving it 33 cents shy of the $4,400 line. Gold ETFs have now logged eight straight sessions of inflows, but with the 10-year back above 5% and the dollar index near 100, here is what decides whether this is a reversal or a bounce.
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October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changedRate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
Author  Irene Q.
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Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
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US input costs rose at the fastest pace in four years — the September flash PMI beat is an inflation story, not a growth storyUS September flash PMIs came in far above expectations, with the composite at 58.4, a five-year high. But the detail that moved markets was input cost inflation at its fastest since October 2022, driven by fuel, transport and supply shortages. Brent is back above $100 and the 10-year Treasury yield has hit its highest since 2007.
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US September flash PMIs came in far above expectations, with the composite at 58.4, a five-year high. But the detail that moved markets was input cost inflation at its fastest since October 2022, driven by fuel, transport and supply shortages. Brent is back above $100 and the 10-year Treasury yield has hit its highest since 2007.
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Brent edges toward $99 as Trump rejects Iran's Hormuz proposal — why the war-risk premium won't rebuildBrent crude rose 0.92% to $98.51 and WTI gained 1.15% to $93.51 after President Trump rejected Iran's seven-day proposal to reopen the Strait of Hormuz. But both benchmarks remain about 12% below their early-September highs, because supply never actually stopped. Hormuz flows ran at 33.7 million barrels this week, in line with the prior week, and Saudi Arabia's East-West pipeline restarted on September 22.
Author  Suzie
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Brent crude rose 0.92% to $98.51 and WTI gained 1.15% to $93.51 after President Trump rejected Iran's seven-day proposal to reopen the Strait of Hormuz. But both benchmarks remain about 12% below their early-September highs, because supply never actually stopped. Hormuz flows ran at 33.7 million barrels this week, in line with the prior week, and Saudi Arabia's East-West pipeline restarted on September 22.
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Four jobs reports in five days: what JOLTS, ADP, claims and the September payrolls mean for the October Fed decisionThe US labour market faces its densest data week of the month. JOLTS job openings land Tuesday (7.2 million expected), ADP on Wednesday (70,000 expected), initial claims on Thursday and the September non-farm payrolls on Friday (100,000 expected, down from 162,000). Markets price a 64%-70% chance of another quarter-point Fed hike on October 28. The dollar index sits at 100.77 and the S&P 500 at 7,729.8.
Author  Mitrade
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