EUR/USD drops during the North American session, down by 0.75% amid a session characterized by overall US Dollar strength, sponsored by Trump’s mild-hawkish pick to lead the Federal Reserve and an inflation report that warrants steady rates by the Federal Reserve.

Unconfirmed reports suggest that China may inject RMB 200 billion into large insurers to bolster their capital buffers, alongside an additional RMB 300 billion into major banks. This move aims to support the banking sector amid downward pressure on net interest margins.

USD/JPY rebounds around 154.50 on Friday at the time of writing, up 0.90% on the day, supported by a renewed recovery in the US Dollar (USD) after several weeks of weakness. The move comes as markets reassess the monetary policy outlook in the United States (US) and Japan.

The Japanese Yen remains under pressure, with concerns raised by local business leaders about its excessive weakness impacting profitability and wage growth.

The Swiss Franc (CHF) weakens against the US Dollar (USD) on Friday, as traders reassess the Federal Reserve outlook following fresh signals from US President Donald Trump on the future leadership of the central bank.

NZD/USD trades around 0.6035 on Friday at the time of writing, down 0.70% on the day, snapping a winning streak that began in mid-January. The pair pulls back after touching a six-month high at 0.6094 in the previous day, amid profit-taking and a firm rebound in the US Dollar (USD).

The Indian Rupee remains under pressure as USD/INR approaches the 92.00 level. The upcoming FY2026/27 Budget announcement is crucial for assessing fiscal consolidation amidst rising capital outflows.

The Pound Sterling retreats on Friday, remaining below 1.3800 after the Trump administration revealed that Kevin Warsh to lead the Federal Reserve. Additionally, a red-hot inflation report on the producer front boosted the Greenback’s appeal.

The Canadian Dollar (CAD) weakens against the US Dollar (USD) on Friday, as the Greenback regains some ground after concerns over the Federal Reserve’s (Fed) independence eased somewhat following US President Donald Trump’s decision to nominate a former Fed Governor as the next Fed Chair.

AUD/USD trades around 0.7000 on Friday at the time of writing, down 0.60% on the day, after retreating from a three-year high reached earlier this week. The pair thus snaps a three-day winning streak, amid a technical correction and a modest recovery in support for the US Dollar (USD).

The British Pound (GBP) trades firmer against the Japanese Yen (JPY) on Friday, as softer-than-expected Tokyo Consumer Price Index (CPI) data weigh on the Yen and revive doubts over the pace of policy normalisation by the Bank of Japan (BoJ). At the time of writing, GBP/JPY is trading around 212.16

Nordea's Macro & Markets report by Sara Midtgaard discusses the ongoing weakness of the US Dollar, driven by geopolitical factors and historical patterns. The report suggests that the current downturn could be long-lasting, with potential for a multi-year period of dollar weakness.

Germany Consumer Price Index (YoY) below forecasts (2.2%) in January: Actual (2.1%)

Germany Harmonized Index of Consumer Prices (MoM) above forecasts (-0.2%) in January: Actual (-0.1%)

Germany Harmonized Index of Consumer Prices (YoY) came in at 2.1%, above expectations (2%) in January

Germany Consumer Price Index (MoM) came in at 0.1%, above expectations (0%) in January

The US Dollar maintains a moderate bid tone against the Japanese Yen on Friday, but has retreated from session highs at 154.40, and is trading at 153.90 at the time of writing, after Trump confirmed that former Federal Reserve (Fed) governor Kevin Warsh will replace the current bank Chairman Jerome

TD Securities' Global Strategy Team provides insights into the Eurozone's inflation outlook. The report indicates that Germany's HICP is expected to remain steady at 2.0% year-on-year in January, with fuel price increases balanced by base effects and industrial electricity subsidies.

GBP/USD trades around 1.3760 on Friday at the time of writing, retreating 0.30% on the day as the US Dollar (USD) regains some traction.

EUR/JPY trades around 183.70 on Friday at the time of writing, up 0.27% on the day. The pair benefits from a relatively supportive macroeconomic backdrop for the Euro (EUR), while the Japanese Yen (JPY) remains under pressure following weaker-than-expected inflation data from Tokyo.

TradingKey - January 2026, U.S. Dollar The index continued its downward trend from 2025, officially breaking below the key 97.0 level and reaching a low of 95.5, marking a near four-year low since Feb

The CAD is showing moderate outperformance against the USD, supported by stronger commodities and firm risk sentiment. The Bank of Canada maintained its benchmark rate at 2.25%, indicating that current policy is suitable for growth.

Eurozone Unemployment Rate came in at 6.2% below forecasts (6.3%) in December

The Euro is in a bearish trend since mid-November, with price action pinned to the support area around 0.8650 after failing to rise above the 0.8700 level earlier this week.

The Euro (EUR) drifts lower on Friday, and trades at 1.1920 at the time of writing, with support at the 1.1900 area in focus.

Germany Hesse CPI (YoY) declined to 2.1% in January from previous 2.2%

Germany Hesse CPI (MoM) declined to 0% in January from previous 0.1%

Germany Saxony CPI (YoY) rose from previous 1.9% to 2.3% in January

Germany Saxony CPI (MoM) dipped from previous 0.2% to 0% in January

Germany Brandenburg CPI (MoM) dipped from previous 0.4% to 0% in January