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

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.