CFD Markets Analysis: News and forecasts for 7 January 2025

23:25

NZD/USD softens below 0.5650 on stronger US economic data NZDUSD

NZD/USD softens to around 0.5635 in Wednesday’s early Asian session.
The stronger US data suggested the Fed is likely to slow the easing cycle.
Investors will monitor how aggressive Trump's tariff plans could be when he takes office.

The NZD/USD pair trades with mild losses near 0.5635 during the early Asian session on Wednesday. The upbeat US Services Purchasing Managers Index (PMI) for December suggested that the Federal Reserve (Fed) will likely slow the pace of its easing cycle, supporting the US Dollar (USD). Later on Wednesday, the Minutes of the Federal Open Market Committee (FOMC) will be in the spotlight.

The services sector activity in the United States accelerated in December. Data released by the Institute for Supply Management (ISM) showed that Services PMI increased to 54.1 in December from 52.1 in November. This reading came in stronger than the estimation of 53.3.

Meanwhile, US job openings unexpectedly increased in November, although hiring slowed during the month. US JOLTS Job Openings rose to 8.09 million in November versus 7.83 million prior and came in above the market consensus of 7.7 million.

The reports indicated a generally stable jobs market and a still robust services sector, which might convince the Fed to slow the pace of rate cuts, lifting the Greenback. According to the CME FedWatch tool, the US rate futures market has priced in a 93.5% chance of a pause in rate cuts this month.

Investors will monitor how aggressive President-elect Donald Trump's tariff policies could be when he takes office. Analysts believe that if US tariffs are broadly lower than Trump promised on the campaign trail and aimed only at "critical" sectors, then the outlook for global growth should improve and the USD should weaken. Additionally, the supportive measures from China could boost the Kiwi as China is a major trading partner for New Zealand.

New Zealand Dollar FAQs

What key factors drive the New Zealand Dollar?

The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

How do decisions of the RBNZ impact the New Zealand Dollar?

The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

How does economic data influence the value of the New Zealand Dollar?

Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

How does broader risk sentiment impact the New Zealand Dollar?

The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

23:17

EUR/USD flubs key technical levels and backslides once again EURUSD

EUR/USD failed to extend a near term technical recovery, sheds 0.4% on Tuesday.
German Retail Sales, EU PPI inflation, US ADP jobs preview on the docket for Wednesday.
Another NFP Friday looms ahead, crimping market momentum as Fed rate cut fears weigh.

EUR/USD turned tail and swooned against the Greenback on Tuesday, shedding four-tenths of one percent after a failed recovery of the 1.0400 handle fizzled out completely. The pair is still trading up from last week’s 26-month low, but not by much. Euro bulls are in desperate need of a turnaround as Fiber continues to grind its way back toward 1.0200.

European Harmonized Index of Consumer Prices (HICP) inflation came in about as expected, with annualized HICP for the year ended in December ticking upwards slightly to 2.4% YoY from the previous 2.2%. However, most of the upward pressure in European inflation figures appears to be either baked into older numbers, or is non-structural ticket items, giving Euro traders some hope that things will continue to improve.

On the US side, ISM Services Purchasing Managers Index (PMI) business activity survey results came in much hotter than expected, as did ISM Services Prices Paid. Both figures were for the month of December, igniting fresh market concerns that the Federal Reserve (Fed) may not be able to deliver near as many rate cuts in 2025 as investors had initially hoped.

Early Wednesday, German Retail Sales and pan-EU Producer Price Index (PPI) inflation data are set to be released, with market forecasts indicating a robust rebound in both metrics. Meanwhile, in the US, December ADP Employment Change figures and the latest Meeting Minutes from the Fed are scheduled for release during the upcoming trading session. The ADP employment figures are seen as an unreliable predictor of what Friday’s Nonfarm Payrolls (NFP) data may reveal, but traders won’t let that stop them from overreacting to large deviations from forecasts. Investors will be looking for any signs that could point to a potential rate cut before June, which would include a pronounced, but not too severe, softening in the labor market.

EUR/USD price forecast

EUR/USD continues to churn on the low side as the US Dollar remains the market’s favored jumping-in point. The pair has shed a little over 6.5% since peaking just above 1.0900 in early November, chalking in a clean technical rejection from the 200-day Exponential Moving Average (EMA) which is now grinding its way down into the 1.0700 handle. Fiber bulls hoping to cement in a fresh bull run from multi-year lows will need to first contend with the 50-day EMA, which is descending into 1.0500.

EUR/USD daily chart

Euro FAQs

What is the Euro?

The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

What is the ECB and how does it impact the Euro?

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

How does inflation data impact the value of the Euro?

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

How does economic data influence the value of the Euro?

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

How does the Trade Balance impact the Euro?

Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

23:01

GBP/USD snaps two-day win streak as risk appetite stumbles GBPUSD

GBP/USD hesitates before falling back below 1.2500 on Tuesday.
A light UK data docket will leave markets focusing on US jobs data.
Another NFP labor dump looms ahead later this week.

GBP/USD caught a mild bid early on Tuesday before turning south once again and shedding roughly one-third of one percent to end the day on the low side of the 1.2500 handle. Cable bidders continue to struggle to find reasons to hit the bids as a technical recovery falters after a tepid two-day bull run from 9-month lows near 1.2350.

It’s been a wobbly start to the new year on the Pound Sterling charts after ending 2024 with a three-month losing streak, and bidding momentum is hobbled near medium-term lows with a light data docket on the cards for Cable traders. UK Like-For-Like Retail Sales surged to 3.1% for the year ended in December, but GBP flows were unable to overcome a fresh bout of risk aversion after US Purchasing Managers Index (PMI) activity and business costs survey results shredded near-term hopes for continued rate cuts from the Federal Reserve (Fed) in early 2025.

US data releases will again rule the calendar on Wednesday, with ADP Employment Change numbers for December and the Fed’s latest Meeting Minutes both slated to release during the upcoming US trading session. ADP jobs figures serve as a wobbly forecast of what Friday’s Nonfarm Payrolls (NFP) jobs numbers might look like, and investors will be hoping to glean some glimmer of hope for any signs of a rate cut before June.

GBP/USD price forecast

GBP/USD is once again trading on the south side of the 1.2500 handle after this week’s bullish momentum fizzled early. The pair is trading into a familiar near-term technical floor as the 50-day Exponential Moving Average (EMA) descends into 1.2650.

Cable bidders have their work cut out for them as they can expect little support from broader markets unless buying pressure behind the Greenback finally eases, and a fresh higher low can get baked into the GBP/USD chart.

GBP/USD daily chart

Pound Sterling FAQs

What is the Pound Sterling?

The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).

How do the decisions of the Bank of England impact on the Pound Sterling?

The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.

How does economic data influence the value of the Pound?

Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.

How does the Trade Balance impact the Pound?

Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

23:00

South Korea Current Account Balance declined to 9.3B in November from previous 9.78B

23:00

Fed’s Bostic: Inflation is expected to decline but warns Fed to be cautious

Federal Reserve Bank of Atlanta President Raphael Bostic said on Tuesday that Fed officials should be cautious with policy decisions given uneven progress on lowering inflation and err on the side of keeping interest rates elevated to achieve their price stability goals, per Bloomberg.

Key quotes

Given that kind of bumpiness in the measures, I think that will call for our policy approach to be more cautious.

I want to make sure we get the right signal, and make sure that our policy is calibrated to that right signal. And if we’ve got to err, I would err on the upside.

I would want to make sure — for sure — that inflation gets to 2%, which means we may have to keep our policy rate higher longer than people might expect.

Inflation trends might show periods of stalling or more aggressive movement, reflecting variability in the data.

Ensuring policy aligns with reliable signals, even amid variability, is a key focus.

Preference to err on maintaining higher rates longer to ensure inflation reaches the 2% target.

Policy rate reductions may be slower or delayed to ensure consistent progress toward inflation goals.

Rates will likely remain elevated longer than originally anticipated to achieve the inflation target.

Market reaction

The US Dollar Index (DXY) is trading 0.02% lower on the day at 108.68, as of writing.

Fed FAQs

What does the Federal Reserve do, how does it impact the US Dollar?

Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

How often does the Fed hold monetary policy meetings?

The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

What is Quantitative Easing (QE) and how does it impact USD?

In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

What is Quantitative Tightening (QT) and how does it impact the US Dollar?

Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.

22:49

US President-elect Trump: Something will have to be done with Canada and Mexico on trade

President-elect Donald Trump said on Tuesday that he will impose tariffs on hundreds of billions of dollars worth of goods from Mexico and Canada to pressure both countries to stop the flow of illegal immigration and cross-border fentanyl shipments, per Reuters.

Key quotes

We're gonna try and have a policy where no windmills are being built.

We will have very serious tariffs on Mexico and Canada.

We're going to make up for that by putting substantial tariffs on Mexico and Canada.

Market reaction

The USD/CAD pair is trading 0.06% higher on the day at 1.4368, as of writing.

US Dollar FAQs

What is the US Dollar?

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

How do the decisions of the Federal Reserve impact the US Dollar?

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

What is Quantitative Easing and how does it influence the US Dollar?

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

What is Quantitative Tightening and how does it influence the US Dollar?

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

22:00

NZD/JPY Price Analysis: Pair tests 100-day SMA amid steady momentum

NZD/JPY inches up to 88.90 on Tuesday, maintaining its recent positive streak.
RSI climbs to 55, signaling improving sentiment, while MACD prints flat green bars.
The 100-day SMA stands as a key hurdle, challenging further upside progress.

NZD/JPY extended its mild gains on Tuesday, nudging higher to 88.90 and building on the tentative recovery seen earlier in the week. Despite this constructive move, the pair appears to be stalling around the 100-day Simple Moving Average (SMA), underscoring a critical barrier that may temper the overall bullish momentum.

From a technical standpoint, the Relative Strength Index (RSI) has risen to 55, placing it in positive territory and suggesting moderate buying interest. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram remains flat and green, indicating that bullish momentum is present but not overwhelming. Until NZD/JPY clears the 100-day SMA with conviction, traders may remain cautious about chasing further upside.

NZD/JPY daily chart

21:47

Australian Dollar changed its course ahead of inflation data, USD recovers

The AUD/USD trimmed gains and turned to negative territory towards 0.6230.
Slower Fed rate cuts keep the US Dollar in check.
US-China trade war fears also cap Aussie gains.
Australian inflation data to be released in Wednesday’s session will be key.

The Australian Dollar failed to hold gains against the US Dollar and retreated towards 0.6230 on Tuesday. Expectations of slower Federal Reserve (Fed) rate cuts and firm Treasury yields favor USD bulls while the Reserve Bank of Australia’s (RBA) dovish lean weighs on the Aussie’s upside. The Aussie trims daily gains after the Greenback recovers on strong US data, while traders await Australian inflation data on Wednesday for further direction.

Daily digest market movers: Aussie trims gains after robust US data sparks Dollar recovery

The USD Index (DXY) hovers near a one-week low as uncertainty surrounds potential sector-specific tariffs under the Trump administration.
Fed officials maintain a more hawkish stance, slowing the pace of 2025 rate cuts, boosting US Treasury yields.
Heightened US-China trade war fears and the RBA’s dovish pivot challenge the Australian Dollar’s attempt to extend gains.
Investors monitor upcoming Federal Open Market Committee (FOMC) minutes and US Nonfarm Payrolls (NFP) for fresh policy clues.
US JOLTS data revealed 8.09 million job openings in November, surpassing estimates and reflecting a healthy labor market.
ISM Services PMI climbed to 54.1, beating forecasts of 53.3, while the Prices Paid Index rose sharply, signaling persistent inflation pressures.
Aussie traders focus on inflation data due Wednesday, which could offer new insight into domestic economic trends and RBA policy expectations.

AUD/USD technical outlook: Aussie eyes 20-day SMA for sustained recovery

The Relative Strength Index (RSI) at 44 shows mild improvement out of oversold territory, while the Moving Average Convergence Divergence (MACD) histogram prints rising green bars. Indicators suggest a nascent recovery, but the pair must confidently break above its 20-day Simple Moving Average (SMA) to confirm a sustained upward move. Without this validation, lingering trade and policy risks may keep bullish momentum in check.

Australian Dollar FAQs

What key factors drive the Australian Dollar?

One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

How do the decisions of the Reserve Bank of Australia impact the Australian Dollar?

The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

How does the health of the Chinese Economy impact the Australian Dollar?

China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

How does the price of Iron Ore impact the Australian Dollar?

Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

How does the Trade Balance impact the Australian Dollar?

The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

21:41

United States API Weekly Crude Oil Stock below forecasts (-0.25M) in January 3: Actual (-4.022M)

21:18

Silver Price Forecast: XAG/USD surges above $30.00, defies strong US Dollar, high yields

Silver rebounds from the 200-day SMA at $29.89, breaking past the $30 mark.
A tweezers-top formation observed at the day’s high of $30.38, suggests potential pullback.
Resistance and support are set at $30.40 and $28.78, respectively, with eyes on movements toward $31.00.

Silver price posts solid gains as it bounces off the 200-day Simple Moving Average (SMA) of $29.89 and climbs past the $30.00 threshold, up by 0.43% at the time of writing. Although US economic data boosted the US dollar and has kept US yields higher, the grey metal has extended its uptrend.

XAG/USD Price Forecast: Technical outlook

From a technical perspective, Silver buyers are struggling to remain above the $30.00 figure for the second straight day. Although they reached a daily high of $30.38, a ‘tweezers-top’ candle chart pattern could pave the way for a pullback.

The Relative Strength Index (RSI) shifted bullishly but remained at around the 50 neutral levels. This suggests that neither buyers nor sellers are in charge.

For a bullish continuation, XAG/USD must clear the $30.40 an ounce barrier. Once surpassed, the next key resistance level would be the 50-day SMA at $30.64, followed by the 100-day SMA at $30.78. On further strength, the $31.00 would be exposed.

Conversely, If XAG/USD drops below the 200-day SMA, sellers could push the grey’s metal price lower. Key support levels would be the December 31 swing low of $28.78, followed by the September 6 daily low of $27.69.

XAG/USD Price Chart – Daily

Silver FAQs

Why do people invest in Silver?

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Which factors influence Silver prices?

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

How does industrial demand affect Silver prices?

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

How do Silver prices react to Gold’s moves?

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

19:59

Gold price trim gains amid strong US data, Trump’s remarks

Gold climbs to $2,664 but faces pressure from a strong US labor market and Trump's assertive tariff plans.
Trump’s unexpected remarks on reclaiming the Panama Canal and imposing tariffs on neighbors bolster the US Dollar.
People's Bank of China boosts gold reserves, signaling increased demand as global economic uncertainties persist.

Gold price advanced late in the North American session on Tuesday yet retreated from daily highs on solid United States (US) economic data and US President-elect Donald Trump’s press conference remarks. The XAU/USD trades at $2,648, gains 0.50%.

In the United States, the schedule revealed a strong jobs report amid an increase in job openings, reassuring investors that the labor market is solid. Furthermore, business activity in the services sector improved sharply, weighing on expectations for further easing by the Federal Reserve (Fed).

In the meantime, US President-elect Donald Trump crossed the wires, said he would like to take back control of the Panama Canal and reiterated that he would impose tariffs on Canada and Mexico. This boosted the US Dollar (USD) and capped Gold’s advance.

Earlier, Bullion rose to a two-day peak of $2,664 after China’s central bank increased its Gold reserves for the second straight month by 300K ounces to 73.3 million, an indication that the People’s Bank of China (PBoC) resumed its purchases after a six-month pause.

US Treasury bond yields remained high, bolstering the Greenback. According to the Fed funds futures interest rate contract at the Chicago Board of Trade (CBOT), investors estimate 51 basis points (bps) of easing or two 25 bps interest rate cuts by the Fed toward the end of the year.

Ahead this week, the US economic docket will feature the ADP Employment Change, Initial Jobless Claims figures, the Fed’s last meeting minutes and December’s US Nonfarm Payrolls report.

Daily digest market movers: Gold price climbs amid high US yields, underpinned by PBoC purchases

Gold remains pressured as US real yields rise two bps up to 2.28%.
The US 10-year T-note yield soars six and a half bps to 4.691%.
The US Dollar Index (DXY), which tracks the buck’s performance against a basket of six currencies, edges up by 0.26% at 108.55 after bouncing from a weekly low of 107.75.
The ISM Services PMI in December increased by 54.1, exceeding forecasts of 53.3 and November’s 52.1 reading.
The Job Labor and Turnover Survey (JOLTS) revealed that work openings increased from 7.839 million to 8.098 million in November.
The US trade deficit widened in November, according to the US BEA, reaching $78.2 billion compared to $73.6 billion in October.
Imports climbed by 3.4% MoM to $351.6 billion from $339.9 billion, while exports increased by 2.7%MoM to $273.4 billion from $266.3 billion.

XAU/USD technical outlook: Gold price advances but remains below $2,650

Gold prices have advanced above $2,640, opening the door to exchange hands at around the $2,640 - $2,650 range. Nonetheless, the yellow metal cannot decisively clear the 50-day Simple Moving Average (SMA) at around $2,651, which could pave the way for further upside.

In that outcome, the next ceiling level would be $2,700 ahead of challenging the December 12 peak at $2,726. If surpassed, the next stop would be the record high at $2,790.

Conversely, if sellers drag the XAU/USD below the 100-day SMA of $2,627, look for a test of $2,500 before Gold extends its losses to the 200-day SMA at $2,494.

Gold FAQs

Why do people invest in Gold?

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Who buys the most Gold?

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

How is Gold correlated with other assets?

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

What does the price of Gold depend on?

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

19:34

United States 3-Year Note Auction increased to 4.332% from previous 4.117%

19:20

Forex today: Jobs data, consumer activity figures take center stage on Wednesday

Broad-market hopes for more rate cuts from the Fed were pushed further out on Tuesday after US business activity survey results hinted at inflationary pressures still simmering in the background. Key consumer activity metrics as well as a preview of Friday’s upcoming US NFP jobs data dump will feature on Wednesday.

Here’s what you need to know heading into Wednesday, January 8:

The US Dollar Index (DXY) caught a risk-off bid on Tuesday, bolstered by safe haven flows after US ISM Services PMI figures widely outpaced median market forecasts. With US price pressures still running on the too-hot side and threatening to keep inflation at a higher level than investors have been hoping, the too-good print clipped market sentiment. Coming up on Wednesday, US ADP Employment Change numbers in December will serve as a potential, albeit volatile and untrustworthy, preview of Friday’s NFP jobs print. The Federal Reserve’s (Fed) latest Meeting Minutes will also be released tomorrow.

EUR/USD bullish momentum evaporated on Tuesday, with Fiber falling back below the 1.4000 handle as the Euro continues to struggle to develop bullish momentum. German Retail Sales, alongside pan-European Produce Price Index figures (PPI), will be the key figures to watch on Wednesday.

AUD/USD Went nowhere quickly on Tuesday, testing the high end but remaining hobbled just south of the 0.6300 handle. Monthly Australian Consumer Price Index (CPI) inflation will be releasing early in Wednesday’s Antipodean market segment, and investors are looking for a slight uptick.

USD/JPY continues to grind its way back toward the 160.00 handle as markets bid the Greenback up further. Most of the gains from the Japanese Yen’s technical recovery in 2024 have been fully pared away, and USD/JPY could be knocking on fresh multi-decade highs in short order. Japanese Labor Cash Earnings for the year ended November are expected late Wednesday or early Thursday, and are expected to accelerate slightly, helping to apply pressure to the Bank of Japan (BoJ) to finally increase interest rates.

Economic Indicator

ADP Employment Change

The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

Why it matters to traders?

Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating consensus tend to be USD bullish.

18:49

Canadian Dollar bullish recovery runs out of gas on Tuesday

The Canadian Dollar froze on Tuesday, crimping the week’s early recovery.
Canada’s Ivey PMI slumped in December, missing expectations.
Canadian labor figures due this week set to be eclipsed by looming US NFP print.

The Canadian Dollar (CAD) crimped a recent bullish recovery, halting in place on the charts and cycling familiar levels against the Greenback on Tuesday. The Loonie has recovered some ground after tumbling to multi-year highs at the tail-end of 2024, but bullish momentum remains elusive.

Canada’s Ivey Purchasing Managers Index (PMI) figures disappointed CAD traders that were looking for a reason to buy. Business activity survey results continue to miss the mark, and a low-impact upswing in trade figures in November was too low-tier to produce an upshot in market flows.

Daily digest market movers: CAD waffles as markets await further signs

Canadian Exports and Imports both rose last November, but the data was too long-dated and low-impact to meaningfully direct CAD moves.
Canada’s headline Ivey PMI for December fell to a 12-month low of 44.3 compared to November’s 49.7 as business activity expectations contract sharply.
Despite the headline crunch, the seasonally-adjusted Ivey PMI rose to 54.7 from 52.3, but still missed the forecast print of 55.4, a decidedly lofty expectation.
US business activity survey results took center stage on Tuesday as the ISM Services PMI for December surged to 54.1 versus the expected 53.3 and previous 52.1.
Rising business activity and production costs in the US are reigniting fears of a lack of Federal Reserve (Fed) rate cuts in 2025, cooling risk appetite.
Friday’s upcoming Nonfarm Payrolls (NFP) print will take on renewed interest as investors look for reasons to continue hoping for fresh rate cuts.

Canadian Dollar price forecast

USD/CAD rose to multi-year highs in December, clipping north of the 1.4400 handle before price action settled into a rough sideways grind, keeping bids just south of the key price level. Loonie markets have finally plugged the slow bleed that dragged the Canadian Dollar to its lowest prices against the Greenback since the pandemic, but a firm bullish recovery remains elusive.

1.4300 is firming up as an immediate technical floor. Even if CAD flows are able to generate enough momentum to pierce the key level, a rising 50-day Exponential Moving Average (EMA) will pose the next immediate risk rising into 1.4200.

USD/CAD daily chart

Canadian Dollar FAQs

What key factors drive the Canadian Dollar?

The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

How do the decisions of the Bank of Canada impact the Canadian Dollar?

The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

How does the price of Oil impact the Canadian Dollar?

The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

How does inflation data impact the value of the Canadian Dollar?

While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

How does economic data influence the value of the Canadian Dollar?

Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

18:19

US Dollar extends gains on robust US data

DXY holds near 108.40 on Tuesday with gains.
Fed’s hawkish shift in December underpins higher yields.
Markets digest strong JOLTS and ISM data.

The US Dollar Index (DXY), which measures the value of the USD against a basket of currencies, trades with gains on Tuesday after two days of losses. The Federal Reserve’s (Fed) hawkish tilt supports elevated US bond yields, favoring the USD bulls. Strong labor market and Services PMI figures helped the USD trim losses ahead of December’s Nonfarm Payrolls.

Daily digest market movers: US Dollar recovers after strong data

US yields keep climbing, with the 10-year note near 4.64% and the 30-year at 4.87%, driven by heavy Treasury auctions this week.
Fed Vice Chair for Supervision Michael Barr announced an early resignation effective February 28, potentially avoiding legal battles under the next administration.
December ISM Services Purchasing Managers Index rose to 54.1 from 52.1, beating 53.3 forecasts. Prices Paid jumped to 64.4, stoking inflation concerns.
Job Openings & Labor Turnover Survey (JOLTS) showed openings at 8.09 million in November, above both October’s 7.83 million and the 7.7 million estimate.
ADP private payrolls, Challenger job cuts, and weekly jobless claims will round out this week’s labor market data before December Nonfarm Payrolls.
Geopolitical tensions and potential trade war flare-ups keep safe-haven demand intact, limiting the US Dollar’s downside despite profit-taking.

DXY technical outlook: Indicators stay firm above key support

The US Dollar Index maintains an overall bullish structure, with technical indicators retaining upward momentum. Despite intraday softness, the DXY has successfully defended its 20-day Simple Moving Average (SMA), reflecting solid underlying support.

While near-term overbought signals could prompt modest pullbacks, ongoing demand for US assets and higher yields may keep the index elevated, barring any major risk reversals.

US Dollar FAQs

What is the US Dollar?

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

How do the decisions of the Federal Reserve impact the US Dollar?

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

What is Quantitative Easing and how does it influence the US Dollar?

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

What is Quantitative Tightening and how does it influence the US Dollar?

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

17:39

Dow Jones Industrial Average freezes as investors balk at too much growth

The Dow Jones was mired in congestion near 43,000 on Tuesday.
US ISM PMI figures came in much hotter than expected in December.
Above-forecast business survey results are reigniting fresh fears of fewer Fed cuts.

The Dow Jones Industrial Average (DJIA) churned on Tuesday as tech stocks pared back recent gains, with investors pushed further off their Goldilocks stance after a hotter-than-expected print in December’s ISM Purchasing Managers Index (PMI) crimped rate cut hopes heading into 2025.

Equity markets hoping to extend last year’s AI-fueled tech bull run into the new year ran into a hard wall on Tuesday, with key darlings of the tech space giving back recent gains. Profit-focused shareholders bluntly want their preferred silicon wafer-punching companies to lean further into demand from the AI tech space, even as the segment of that sector that deals with actually selling AI solutions to consumers and businesses struggle to develop stable methods of generating profit.

ISM’s Services PMI print for December came in well above median market forecasts, clocking in at 54.1 versus the expected 53.3 and rebounding firmly from the previous month’s 52.1. ISM Services Priced Paid survey results also accelerated to a 22-month high of 64.4 in December compared to November’s 58.2.

With business activity outlooks broadly rising faster than expected, as well as prices paid by those businesses appearing to be back on the rise, investors are balking at the prospect of inflation remaining stickier than previously expected. Firm business activity growth plus rising producer prices will make it more difficult for the Federal Reserve (Fed) to deliver as many rate cuts as traders were hoping.

According to the CME’s FedWatch Tool, rate traders now expect the Fed to hold off on any further rate cuts until June. The Fed is expected to stand pat on rates through most of the first half of 2025.

Dow Jones news

A little over half of the companies listed on the Dow Jones are testing into the green on Tuesday, keeping the headline index on balance despite heavier downside in key tech stocks. Nvidia (NVDA) tumbled over 5%, falling back below $142 per share as investor expectations for the chipmaker cool off. The company recently unveiled a new range of chipsets based on its now-familiar Blackwell architecture, but its decision to focus the latest release on a back-to-its-roots pivot to providing hardware for gaming rigs received a delayed tepid response from AI tech investors who initially bid the company up earlier in the week.

Dow Jones price forecast

A rough consolidation pattern is cooking into the Dow Jones chart, keeping the major equity index hobbled in a choppy range between 43,000 and 42,000. Short pressure remains unable to push price action firmly into a downside trajectory, and bids remain bolstered into a technical ceiling from the 50-day Exponential Moving Average (EMA) descending through 43,200.

Bulls tired of punching the buy button could run out of gas after keeping the Dow Jones pushed into a one-sided bullish trend. The DJIA has outpaced its own 200-day EMA for 14 straight months, and bidders could be tired of winning, which could see the index pare further gains and fall back to softer chart regions.

Dow Jones daily chart

Dow Jones FAQs

What is the Dow Jones?

The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.

What factors impact the Dow Jones Industrial Average?

Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.

What is Dow Theory?

Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.

How can I trade the DJIA?

There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.

17:34

Mexican Peso holds steady after strong US PMI, jobs data

Mexican Peso shows resilience, marginally dipping to 20.29 despite strong US services sector growth and job market data.
Trump denies narrow tariff plans, boosting the US Dollar, yet the Peso maintains its ground against market fluctuations.
Upcoming Mexican CPI data awaited as economic indicators from the US continue to shape Fed rate expectations.

The Mexican Peso posted minimal gains against the Greenback on Tuesday after data suggested that the United States (US) economy remained solid, while traders pared back the Federal Reserve's (Fed) first interest rate cut until July. At the time of writing, the USD/MXN trades at 20.27, down 0.16%.

The financial markets continued to reflect a positive market tone after The Washington Post published an article mentioning that US President-elect Trump's team is working toward narrowing tariffs that will “only cover critical imports.” Even though Trump refuted the article and boosted the buck, the Mexican Peso shrugged off those comments and appreciated against the US Dollar.

On the data front, the Institute for Supply Management (ISM) revealed that business activity in the Services sector improved sharply. At the same time, the survey showed that a sub-component of the Purchasing Managers Index (PMI) linked to prices hit its highest level since 2023.

At the same time, the US Bureau of Labor Statistics revealed that job vacancies broke above the 8 million threshold, indicating that the labor market is strengthening.

In Mexico, the economic docket remained absent on Tuesday and will resume on Thursday. The Consumer Price Index (CPI) will be revealed, and it is foreseen to continue its downward trajectory toward Banco de Mexico’s (Banxico) 3% target.

On Wednesday, the US economic schedule will feature the ADP Employment National Change, Initial Jobless Claims figures, and the Fed’s last meeting minutes.

Daily digest market movers: Mexican Peso consolidates ahead of Mexico’s CPI data

The US Dollar Index (DXY) rises 0.17%, up at 108.46, a tailwind for the USD/MXN exotic pair.
The ISM Services PMI in December increased by 54.1, exceeding forecasts of 53.3 and November’s 52.1 reading.
The Job Labor & Turnover Survey (JOLTS) revealed that work openings increased from 7.839 million to 8.098 million in November.
According to the Bureau of Economic Analysis, the US trade deficit widened in November, reaching $78.2 billion compared to $73.6 billion in October.
Imports climbed by 3.4% to $351.6 billion from $339.9 billion, while exports increased by 2.7% to $273.4 billion from $266.3 billion.

USD/MXN technical outlook: Mexican Peso remains subdued near 20.30

The USD/MXN remains tilted in a vague direction, meandering around the 50-day Simple Moving Average (SMA) at 20.27. The Relative Strength Index (RSI), despite turning flat in bearish territory, indicates the exotic pair might consolidate, awaiting a fresh catalyst.

Therefore, if USD/MXN drops below the 50-day SMA, the next support would be the 20.00 figure. A breach of the latter will expose 100-day SMA at 19.91, followed by the 19.50 figure.

Conversely, if buyers stepped in and lifted the USD/MXN above 20.50, the next ceiling level would be the year-to-date (YTD) high of 20.90, ahead of 21.00 and the March 8, 2022 peak of 21.46.

Mexican Peso FAQs

What key factors drive the Mexican Peso?

The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.

How do decisions of the Banxico impact the Mexican Peso?

The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.

How does economic data influence the value of the Mexican Peso?

Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.

How does broader risk sentiment impact the Mexican Peso?

As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

16:09

EUR/USD Price Analysis: Pair remains under 20-day SMA, retreated towars 1.0370 EURUSD

EUR/USD inches lower to 1.0370 on Tuesday after repeated rejections at the 20-day SMA.
The RSI rises to 45, suggesting improving momentum but still hinting at a cautious outlook.
MACD shows flat green bars, indicating easing bearish pressure yet no clear bullish shift.

EUR/USD managed to climb towards the 1.0370-1.0390 area at the begging of the year, continuing its fragile attempt to recover from recent losses. Despite this uptick, the pair has repeatedly struggled to decisively break above the 20-day Simple Moving Average (SMA) since the start of 2025, reinforcing the notion that sellers may still dictate the short-term direction.

Technical readings are mixed. While the Relative Strength Index (RSI) has lately improved to 45 suggesting a modest pickup in buying interest but it remains in negative territory, indicating that buyers are not yet fully in control. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram prints flat green bars, implying that bearish momentum is easing but hasn’t given way to a sustained bullish push.

Looking ahead, a solid move above the 20-day SMA would be necessary to establish a more convincing recovery and open the door for further gains. Absent that, the pair remains vulnerable to renewed selling pressure, keeping its recent bounce on cautious footing.

EUR/USD daily chart

15:12

GBP/USD retreats below 1.2500 on strong US Services PMI, JOLTS data GBPUSD

GBP/USD reaches new peak after Trump advisors hint at targeted tariffs, weakening the US Dollar despite strong US data.
US Services PMI and JOLTS job openings surpass expectations, signaling robust economic health.
UK retail sales hit highest level since March 2024, adding to the positive outlook for the Pound amid a light UK economic calendar.

The Pound Sterling rose to a new four-day peak of 1.2575 on Tuesday after posting its biggest gain in the last three days. The Washington Post revealed that US President-elect Donald Trump's advisers considered applying tariffs to specific imports, weakening the Greenback, which of late was boosted after upbeat US data. The GBP/USD trades at 1.2495, down by 0.12%.

Strong ISM Services PMI and JOLTS data, weighed on the GBP/USD pair

US equities remain mixed early during the North American session. The Institute for Supply Management (ISM) revealed that Services PMI rose by 54.1, exceeding estimates of 53.3 up from 52.1.

At the same time, the US Department of Labor revealed that the number of JOLTS job openings rose sharply, exceeding forecasts of 7.70 million to 8.098 million.

The data suggests the economy is in good shape and overshadowed the release of the Balance of Trade data.

The US Bureau of Economic Analysis (BEA) revealed that the trade deficit widened in November, with the Trade Balance figures coming at $-78.2 billion, more than the $-73.6 billion reported in October.

According to BEA, Imports increased from $339.9 billion to $351.6 billion, a 3.4% increase. US Exports rose from $266.3 billion to $273.4 billion, a 2.7% increase.

In the UK, the British Retail Consortium revealed that retail sales rose 3.2% year over year in December, their highest level since March 2024.

Ahead this week, the UK economic docket remains scarce. In the US, the calendar will feature the ADP National Employment report and Initial Jobless Claims data for the week ending January 4.

GBP/USD Price Forecast: Technical outlook

From a technical standpoint, the GBP/USD daily chart suggests the pair is reversing some of its weekly gains, the release of US data. If the pair drops below 1.2450, look for a retest of 1.2400. On further weakness, the next support would be the January 2 low of 1.2351.

On the other hand, if buyers buy the dip, they could retest 1.2500 and the daily high of 1.2575 before reaching 1.2600.

British Pound PRICE Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Swiss Franc.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.24%	0.20%	0.48%	0.20%	0.03%	-0.03%	0.53%
EUR	-0.24%		-0.04%	0.21%	-0.03%	-0.21%	-0.27%	0.27%
GBP	-0.20%	0.04%		0.30%	0.01%	-0.17%	-0.23%	0.32%
JPY	-0.48%	-0.21%	-0.30%		-0.28%	-0.44%	-0.52%	0.04%
CAD	-0.20%	0.03%	-0.01%	0.28%		-0.17%	-0.23%	0.31%
AUD	-0.03%	0.21%	0.17%	0.44%	0.17%		-0.06%	0.48%
NZD	0.03%	0.27%	0.23%	0.52%	0.23%	0.06%		0.55%
CHF	-0.53%	-0.27%	-0.32%	-0.04%	-0.31%	-0.48%	-0.55%

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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

15:12

US JOLTS Job Openings rise to 8.09 million in November vs. 7.7 million forecast

Job openings in the US rose above 8 million in November.
US Dollar Index stays in positive territory slightly above 108.50.

The number of job openings on the last business day of November stood at 8.09 million, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday. This reading followed the 7.83 million reported in October and came in above the market expectation of 7.7 million.

"Over the month, hires and total separations were little changed at 5.3 million and 5.1 million, respectively," the BLS said in its press release. "Within separations, quits (3.1 million) decreased, but layoffs and discharges (1.8 million) changed little."

Market reaction

The US Dollar Index edged higher following this report and was last seen gaining 0.25% on the day at 108.55.

15:05

US ISM Services PMI rises to 54.1 in December vs. 53.3 expected

US ISM Services PMI in the US rose more than expected in December.
US Dollar Index turns positive on the day near 108.50.

The economic activity in the US service sector expanded at an accelerating pace in December, with the ISM Services PMI rising to 54.1 from 52.1 in November. This reading came in above the market expectation of 53.3.

Other details of the report showed that the Prices Paid Index, the inflation component, rose to 64.4 from 58.2, while the Employment Index edged lower to 51.4 from 51.5.

Market reaction

The US Dollar gathered strength against its major rivals with the immediate reaction. At the time of press, the USD Index was up 0.2% on the day at 108.52.