Forex Today: Markets warm up for US inflation data

The Greenback added to recent gains and rose to fresh cycle highs backed by investors’ repricing of fewer (if any at all) interest rate cuts by the Federal Reserve this year.

Here is what you need to know on Tuesday, January 14:

The US Dollar Index (DXY) surpassed the 110.00 hurdle for the first time since November 2022, amid higher yields and speculation of just only one interest rate reduction by the Fed in the current year. The Producer Prices will take centre stage, seconded by the NFIB Business Optimism Index, and the RCM/TIPP Economic Optimism Index. In addition, the Fed’s Schmid and Williams are expected to speak.

EUR/USD performed poorly and extended its bearish trend to the sub-1.0200 region against the backdrop of persistent upside pressure in the US Dollar. The speech by the ECB’s Lane will be the sole event on the euro calendar.

GBP/USD kept its downtrend well in place, revisiting the area below 1.2100 although managing to regain some balance afterwards. The BoE’s Breeden is due to speak.

USD/JPY clinched its third consecutive daily pullback on the back of extra appreciation of the Japanese Yen. The Eco Watchers Survey, Bank Lending figures and Current Account results are expected on the Japanese docket. In addition, the BoJ’s Himino is due to speak.

AUD/USD attempted a humble bounce after four days in a row of losses, although it remained under pressure and close to the 0.6100 region. The Westpac Consumer Confidence Index will be released along with final Building Permits and Private House Approvals.

Prices of the American WTI extended their auspicious monthly rebound and trespassed the $78.00 mark per barrel on further US sanctions to Russian oil.

Prices of Gold gave away part of their recent multi-day advance following the stronger Greenback and speculation of just one interest rate cut by the Fed this year. By the same token, Silver prices deflated to five-day lows, breaching the key support at the $30.00 mark per ounce.