CFD Markets Analysis: News and forecasts for 16 January 2025

23:50

Japan Foreign Investment in Japan Stocks: ¥313.3B (January 10) vs ¥-74B

23:33

EUR/USD strung along 1.03 ahead of thin Friday docket EURUSD

EUR/USD spun in a circle on Thursday, mired in the 1.0300 handle.
Final German inflation figures hit the mark, pan-EU figures expected to do the same.
US data is limited on Friday as Fiber traders gear down.

EUR/USD middled through Thursday’s market action with bids hung up on the 1.0300 price handle. There’s a limited offering from the economic data docket on Friday, and traders will be keeping an ear to the ground for any rumblings from central bank policymakers.

German Harmonized Index of Consumer Prices (HICP) inflation figures came in exactly as markets expected on Thursday, not exactly a large reach as they were non-preliminary figures and rarely change unless things are going disastrously wrong. Retail Sales figures moderated in December, easing back to 0.4% MoM in the headline figure. Markets expected a tick down to 0.6% from the previous month’s revised 0.8%. Core Retail Sales excluding automotive expenditures rose to 0.4% MoM from 0.2%, meeting median analyst forecasts. The mixed figures failed to spark significant changes in investor sentiment in either direction.

Coming up on Friday, little of note sits on the data docket, with more non-preliminary HICP inflation figures due for the broader pan-European economic zone, which is expected to confirm a slight uptick to 2.8% YoY from 2.7%. On the US side of the Atlantic, US Housing Starts, Building Permits, and Industrial Production figures for December are all expected to print relatively close to previous figures, and are unlikely to drive much market volatility on their own.

EUR/USD price forecast

Fiber has extended into a two-day flat spin, with bids getting stuck in the mud at the 1.0300 technical handle. Price action has moderated after last week’s test of the 1.0200 handle, chalking in a fresh 26-month low in the process. Bullish recovery attempts have thus far failed to materialize in a meaningful way, though EUR/USD is slowly crawling its way back from what is otherwise shaping up to be a fourth straight calendar month of declines in the FX market’s most-traded pair.

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.

23:28

Fed's Goolsbee: More comfortable that the labor market is stabilizing

Chicago Federal Reserve Bank President Austan Goolsbee said on Thursday that he feels more comfortable with the labor market stabilizing, per Reuters.

Key quotes

I have over the last several months become more comfortable that this is a stabilization of the job market at a full-employment-like level, as opposed to something that was crashing through normal and turning into something worse.

Sees less deterioration in a broad basket of labor-market indicators.

Thinks the trends from last summer look less like the start of a downturn and more like a benign adjustment from a hot job market to a balanced one.

Market reaction

The US Dollar Index (DXY) is trading 0.01% higher on the day at 108.95, 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.

23:21

GBP/USD snaps two-day win streak, UK Retail Sales in the pipe GBPUSD

GBP/USD pivoted around 1.2200 on Thursday as Pound bids waffle.
UK data continues to miss the mark, UK Retail Sales figures up next.
Forex markets get a rare breather from US-centric economic data.

GBP/USD churned chart paper near familiar levels on Thursday, chalking in a flat day after exploring some intraday downside and snapping a two-day win streak as price action gets hung up on the 1.2200 handle.

UK Gross Domestic Product (GDP) growth rebounded in November but missed median market forecasts, registering a slim 0.1% MoM, down from the expected 0.2%, and climbing only moderately from the previous -0.1% contraction. UK Industrial Production barely moved the needle in November, contracting by 0.4% and entirely missing the forecast upswing to 0.1% compared to the previous month’s -0.6% backslide.

On the US side, Retail Sales figures moderated in December, easing back to 0.4% MoM in the headline figure. Markets expected a dip to 0.6% from the previous month’s revised 0.8%. Core Retail Sales, excluding automotive expenditures, rose to 0.4% MoM from 0.2%, meeting median analyst forecasts. The mixed figures failed to spark significant changes in investor sentiment in either direction.

UK Retail Sales figures for December are due early during Friday’s London market session and are expected to rebound to 0.4% from November’s 0.2% figure. On an annualized basis, Retail Sales are forecast to rally to 4.2% from the previous 0.5%, a lofty median target to set for an economic zone that has routinely missed market expectations in recent months.

GBP/USD price forecast

GBP/USD is struggling to stage a meaningful technical recovery after dumping into a fresh 15-month low late last week. Cable bids bounced off the 1.2100 handle, and price action is getting hung up on the 1.2200 technical level.

Despite some back-and-forth on the weekly candles, Cable is headed for a fourth straight monthly close in the red, and the trend is certainly looking particularly unfriendly to Pound bulls. However, technical oscillators are pinned deep into bear country, and price action traders might be looking to catch a rising knife as broader market momentum pivots.

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.

23:12

USD/CAD holds below 1.4400 on weaker US Dollar, lower US yields USDCAD

USD/CAD trades with a mild negative bias near 1.4395 in Friday’s early Asian session.
US Retail Sales rose less than expected in December 2024.
BoC expects to end quantitative tightening in the first half of 2025.

The USD/CAD pair trades with mild losses around 1.4395 during the early Asian session on Friday, pressured by the weakening of the US Dollar (USD) and a decline in US yields across the curve. Later on Friday, investors will keep an eye on the US housing data for December, including Building Permits and Housing Starts. Also, the US Industrial Production will be released.

Data released by the US Census Bureau on Thursday showed that US Retail Sales rose by 0.4% MoM in December, reaching $729.2 billion. This reading came in weaker than the market expectations of a 0.6% rise and lower than the previous reading of a 0.8% increase (revised from 0.7%). The Greenback edges lower after the weaker US Retail Sales data. However, the downside for the USD might be limited amid the Federal Reserve's (Fed) cautious approach to cutting interest rates this year.

On the Loonie front, investors braced for potential US trade tariffs by US President-elect Donald Trump and the Bank of Canada (BoC) said it would end its quantitative tightening program in the coming months. BoC Deputy Governor Toni Gravelle said on Thursday that although the BoC is expected to end its quantitative tightening program in 2025, the Canadian central bank won't be immediately pivoting into a similar quantitative easing structure as it has done in recent years.

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.

23:07

GBP/JPY pumps the brakes, extends into a two day backslide

GBP/JPY explored the downside on Thursday as GBP faith withers.
The Pound Sterling lost market support after UK growth figures missed the mark.
UK Retail Sales are due on Friday, lofty forecasts might set Guppy up for failure.

GBP/JPY pivoted back into the low end on Thursday, extending into a second day of losses after UK economic growth and activity figures pummeled the Pound Sterling, and GBP traders will be shuffling their feet ahead of Friday’s UK Retail Sales figures for December.

UK Gross Domestic Product (GDP) growth rebounded in November, but missed median market forecasts to print at a thin 0.1% MoM, down from the expected 0.2% and climbing only moderately from the previous -0.1% contraction. UK Industrial Production barely moved the needle in November, contracting by -0.4% and entirely missing the forecast upswing to 0.1% compared to the previous month’s -0.6% backslide.

UK Retail Sales figures for December are due early during Friday’s London market session, and are expected to rebound to 0.4% from November’s 0.2% figure. On an annualized basis, Retail Sales are forecast to rally to 4.2% from the previous 0.5%, a lofty median target to set for an economic zone that has routinely missed market expectations in recent months.

GBP/JPY price forecast

The Guppy has been trapped in a back-and-forth pattern on the charts as monthly closes trade blows across the bulls and the bears. GBP/JPY is poised for a third straight week of firm declines, and the pair is set to get hung up on familiar technical support zones conglomerating around the 190.00 major price handle.

GBP/JPY 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.

21:58

NZD/JPY Price Analysis: Fresh sell-off signals deeper downside potential

NZD/JPY slipped to around 87.00 in a renewed wave of selling.
RSI plunges, reinforcing the pair’s tilt toward sustained bearish momentum.
MACD histogram prints rising red bars, hinting that sellers may remain in control for now.

The NZD/JPY cross found itself under renewed pressure on Thursday, sliding 0.84% to around 87.05. Persistent selling has kept the pair pinned to lower levels, erasing gains from earlier this week. The swift downside move suggests that market participants remain inclined to sell on any short-lived rebounds, effectively tilting the near-term tone toward negativity.

In terms of technical indicators, the Relative Strength Index (RSI) has declined sharply to 37, emphasizing building downside momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram shows rising red bars, underscoring that sellers are retaining their grip. Combined, these signals point to a cautious backdrop where buyers may hesitate to reenter aggressively.

Looking ahead, immediate support appears near the 86.80–87.00 region, with a break below this zone potentially opening the door toward 86.50 or lower. On the flip side, if bulls manage to drive NZD/JPY above the 87.70 pivot, it could spark a modest recovery, though the overall bias would likely stay negative unless the pair can reclaim the 88.00 handle with conviction.

NZD/JPY daily chart

21:54

USD/CHF Price Forecast: Pulls-back from eight-month high of 0.9200 USDCHF

USD/CHF retreats 0.18% from peak, unable to hold gains despite positive U.S. economic reports.
Technical analysis: resistance at 0.9135; further gains possible if surpassed.
Support levels at 0.9098 and 0.9077; critical support at January low of 0.9007.

The USD/CHF retreats after hitting an eight-month peak at 0.9200 and drops towards the 0.9100 mark, registering losses of over 0.18%. Upbeat data from the United States (US) failed to bolster the Greenback, which extended its losses following dovish remarks from Fed Governor Christopher Waller.

USD/CHF Price Forecast: Technical outlook

Since October of last year, the USD/CHF enjoyed a healthy uptrend, with the Greenback appreciating over 9% against the Swiss Franc. However, buyers failed to prolong the trend, as the pair tumbled to a six-day low on Wednesday at 0.9077 before recovering some ground.

Although the pair is set to end Thursday’s session with losses, further upside is seen after achieving a higher low, with prices finding acceptance near the 0.9098-0.9135 range.

If buyers clear 0.9135, the next resistance will be the January 13 daily high at 0.9200, the top of a ‘shooting star.’ If broken, the next ceiling level will be the April 2024 peak at 0.9224.

Conversely, if USD/CHF remains below 0.9100, the first support would be 0.9098 and 0.9077. If those levels are taken out, look for a possible bounce at 0.9007, the January 6 swing low.

USD/CHF Price Chart - Daily

Swiss Franc PRICE Today

The table below shows the percentage change of Swiss Franc (CHF) against listed major currencies today. Swiss Franc was the strongest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.03%	-0.06%	-0.05%	-0.04%	-0.04%	-0.02%	-0.05%
EUR	0.03%		-0.04%	0.00%	-0.02%	-0.03%	0.02%	-0.03%
GBP	0.06%	0.04%		0.02%	0.03%	0.03%	0.05%	0.02%
JPY	0.05%	0.00%	-0.02%		0.03%	0.02%	0.04%	0.00%
CAD	0.04%	0.02%	-0.03%	-0.03%		0.00%	0.04%	-0.01%
AUD	0.04%	0.03%	-0.03%	-0.02%	-0.00%		0.02%	-0.02%
NZD	0.02%	-0.02%	-0.05%	-0.04%	-0.04%	-0.02%		-0.03%
CHF	0.05%	0.03%	-0.02%	-0.00%	0.01%	0.02%	0.03%

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

21:46

NZD/USD Price Analysis: Dip challenges support at the 20-day SMA NZDUSD

NZD/USD eases on Thursday, hovering near 0.5610 in a cautious market mood.
MACD histogram shows rising green bars, hinting at subdued but ongoing buyer interest.
RSI sits at 45, slipping slightly yet staying within a mild negative zone.

The NZD/USD pair encountered modest pressure on Thursday, drifting 0.16% lower to roughly 0.5610. Despite this pullback, the exchange rate has managed to hold close to its 20-day Simple Moving Average (SMA), a signal that buyers could be attempting to build a floor under recent price action. While momentum remains tepid, the pair’s resilience at this critical threshold indicates a measured appetite for higher levels.

Technically, the Moving Average Convergence Divergence (MACD) histogram continues to print rising green bars, suggesting that, although not overwhelming, there is a degree of underlying demand. Meanwhile, the Relative Strength Index (RSI) has edged down to 45, reflecting a slight decline in bullish conviction without totally ceding ground to sellers. This delicate balance between optimism and caution leaves NZD/USD in a precarious spot.

Going forward, a sustained hold above the 20-day SMA near 0.5600 would underline the possibility of further gains, potentially guiding the pair toward the 0.5650 region. Conversely, a break beneath the immediate support could target 0.5580, with a deeper slide exposing 0.5550 if sentiment takes another negative turn.

NZD/USD daily chart

21:30

New Zealand Business NZ PMI rose from previous 45.5 to 45.9 in December

20:48

Australian Dollar retreats from weekly highs despite upbeat job figures

Pair slips to 0.6230 on Thursday by nearly 0.30%.
Early gains fade after strong Australian employment data.
Diminished tariff risks and risk-on mood cushion the downside.

AUD/USD faced rejection near 0.6250 and fell to 0.6230 in Thursday trading, paring initial gains spurred by Australia’s mixed labor report. A more optimistic market mood helped by reduced anxiety over potential tariff disruptions limits deeper losses. Still, the pair remains under scrutiny as investors monitor the Reserve Bank of Australia’s (RBA) policy direction and the US Dollar’s movements, which trades weak after mid-tier data.

Daily digest market movers: Aussie rotates lower as traders assess fresh local labor data

The Australian Bureau of Statistics revealed a 53.6K employment increase in December, handily beating the 15K forecast and the prior 28.2K.
The Unemployment Rate edged up to 4.0%, matching estimates, from 3.9%.
Markets now see a 67% chance the RBA will slash its Official Cash Rate by 25 basis points to 4.10% in February, with further easing likely by April.
The US Dollar remains range-bound as investors weigh near-term catalysts, including potential shifts in fiscal and trade policies under President-elect Trump.
On the data front, Retail Sales for December posted a 0.4% monthly advance, missing the 0.6% forecast and below the prior 0.7% (revised to 0.8%).
Initial Jobless Claims rose to 217K for the week ending January 10, while the prior 201K reading was revised to 203K.
The CME FedWatch Tool shows that markets are pricing in that the Federal Reserve will keep rates steady in January with inflation uncertainties tied to the incoming Trump administration.

AUD/USD technical outlook: Pair slips below 0.6250, testing 20-day moving average

The AUD/USD declined 0.30% to 0.6230 on Thursday, retreating from a one-week peak. The Relative Strength Index (RSI) sits near 48, gradually easing in negative territory. The Moving Average Convergence Divergence (MACD) histogram shows rising green bars, hinting at lingering bullish attempts.

Although the pair backed off after briefly trading above its 20-day Simple Moving Average (SMA), the ability to hold near this key threshold could signal emerging support.

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.

20:45

Gold price soars above $2,700 amid weak US Dollar, falling US yields

Gold rallies as US retail sales miss, offset by prior strong consumer spending.
An unexpected rise in US jobless claims pressures the US Dollar and boosts Gold.
Fed Governor Waller's dovish remarks hint at possible rate cuts in March.

Gold price surged above the $2,700 mark on Thursday as the Greenback trimmed some of its earlier gains. Data from the United States (US) revealed that the economy remains solid after the release of consumer spending figures and jobs data. US bond yields fell as traders expect further easing by the Federal Reserve (Fed). At the time of writing, the XAU/USD trades at $2,715, up 0.72%.

Bullion extended its gains as market participants prepare for US President-elect Donald Trump's inauguration. The US Census Bureau revealed that Retail Sales fell short of estimates in December. However, November’s data was upwardly revised, indicating consumer strength.

Other data showed that the number of Americans filing for unemployment insurance jumped for the first time since December 7, 2024, and weighed on the Greenback.

The US Dollar Index (DXY), which tracks the performance of the USD against a basket of six peers, slips 0.14%, down below the 109.00 figure.

Fed Governor Christopher Waller crossed the wires and was dovish, stating that the US Central Bank could lower borrowing costs sooner and faster if the disinflation process evolves.

The US economic docket will remain empty throughout the rest of the day and traders will eye housing data, particularly Building Permits and Housing Starts.

Daily digest market movers: Gold price bolstered by dovish comments, falling US yields

Gold extended its gains as real yields dropped. Measured by the 10-year Treasury Inflation-Protected Securities (TIPS) yield, extended its losses for the second straight day, down five and a half basis points (bps) from 2.234% to 2.18%.
The US 10-year Treasury bond yield slumps five bps, at 4.604%, a tailwind for the golden metal.
US Retail Sales increased by 0.4% MoM in December, below estimates of 0.6%. Although the data missed the mark, an upward revision to November’s figures from 0.7% to 0.8%, showed the economy’s resilience.
Regarding labor market data, Initial Jobless Claims for the week ending January 10 rose by 217K from 201K the previous week, missing estimates of 210K.
The latest inflation data and Fed Waller’s comments pressured the US dollar, as traders had grown confident the US Central Bank would cut rates sooner rather than later. Waller didn’t rule out a cut in the March meeting as inflation “is getting close to what our 2% inflation target would be.”
Chicago’s Fed Austan Goolsbee, a 2025 voter, said he feels more comfortable that the labor market is stabilizing via The Wall Street Journal.
Market participants are pricing in near-even odds that the Fed will cut rates twice by the end of 2025 and see the first reduction in June.

XAU/USD technical outlook: Gold buyers target $2,750 as crucial resistance ahead of ATH

Gold price uptrend extended for the third consecutive trading day, clearing key resistance at $2,700. Bullish momentum remains strong as the Relative Strength Index (RSI) depicts, giving a green light to buyers, to drive the non-yielding metal higher.

XAU/USD first resistance will be the December 12 high of $2,726. Once surpassed, the next stop would be $2,750, followed by the all-time high (ATH) at $2,790.

Conversely, XAU/USD’s drop below $2,700, would sponsor a test of the January 13 swing low of $2,656, followed by the confluence of the 50 and 100-day Simple Moving Averages (SMAs) at $2,639 - $2,642.

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.

19:45

Forex Today: Chinese data could lend support to the risk complex

The US Dollar maintained its bearish tone unchanged and extended its weekly corrective decline on the back of shrinking yields, while investors remained focused on fundamentals and the Fed’s decision in January.

Here is what you need to know on Friday, January 17:

The US Dollar Index (DXY) added to the ongoing multi-day retracement on Thursday, breaking below the 109.00 support zone once again amid further weakness in US yields across the curve. A busy docket on Friday will feature Housing Starts, Building Permits, Industrial and Manufacturing Production, as well as Net Long-term TIC Flows.

EUR/USD gave it a go to the 1.0300 region, although the move fizzled out soon afterwards, eventually ending the day with marginal gains. The EMU’s Current Account results and the final Inflation Rate will take centre stage along with the speech by the ECB’s Cipollone.

GBP/USD advanced for the fourth day in a row, managing well to keep business well above the 1.2200 yardstick. UK Retail Sales will be at the centre of the debate across the Channel at the end of the week.

Further repricing of rate hikes by the BoJ lent support to the Japanese yen and sparked a deeper retracement in USD/JPY, this time approaching the 155.00 mark. The weekly Foreign Bond Investment figures will be only due.

Surprisingly, AUD/USD traded on the defensive on Thursday, briefly breaking below the 0.6200 support despite the inconclusive Dollar and a solid jobs report in Oz. Focus should remain on the slew of Chinese data due on Friday.

Alleviating geopolitical concerns following the Israel-Hamas ceasefire weighed on crude oil prices and dragged prices of WTI to the vicinity of the $77.00 mark per barrel.

Gold prices extended further their uptick, regaining the $2,700 mark per troy ounce and beyond on the back of the Dollar’s irresolute price action and declining US yields across the board. Silver prices, in the meantime, rose to five-week highs in levels just shy of the $31.00 mark per ounce.

19:34

BoC's Gravelle: We expect to announce end of quantitative tightening in the first half of 2025

Bank of Canada (BoC) Deputy Governor Toni Gravelle noted on Thursday that although the BoC is expected to draw down its quantitative tightening program in 2025, the Canadian central bank won't be immediately pivoting into a similar quantitative easing structure like it has done in recent years.

Key highlights

We will need to restart our normal-course asset purchases gradually, and well before September.

We expect to announce end of quantitative tightening in the first half of 2025.

We will not be buying assets on an active basis to stimulate the economy like we did with QE during the pandemic.

We will not be ending QT out of any concern about functioning of repo markets; we think other factors are causing these pressures.

We will hold not only government of Canada bonds but also GOC T-bills and term repos; may not hit desired composition of assets till around 2030.

We will probably adjust our estimated range from time to time, possibly both up and down.

T-bill purchases will take place in the primary market and we expect them to resume in Q4 this year, initially with relatively small amounts.

While QT is almost finished, the composition of our asset holdings won't be back to normal for quite some time.

A Trump tariff on exports would have a big negative impact on economic growth.

There would likely be an inflation impact at the same time that we have a slowdown in the economy. So that puts a central bank in a very complicated space.

18:57

Canadian Dollar runs out of gas, falls back once more

The Canadian Dollar backslid around 0.4% against the Greenback on Thursday.
A lack of meaningful data from Canada leaves the Loonie in the lurch.
USD/CAD continues to consolidate as markets await shifts in rate stances.

The Canadian Dollar fell back around four-tenths of one percent on Thursday, dipping against the Greenback and falling back into familiar congestion territory near multi-year lows. Canadian data remains impactful as Loonie traders await meaningful releases, and wobbly US data on Thursday kept market flows with one foot in the US Dollar.

Canada saw slightly fewer Housing Starts in December, and US Retail Sales also eased, causing US Business Inventories to rise slightly. US Initial Jobless Claims also came in slightly higher than expected, but still well within recent norms.

Daily digest market movers: CAD falls back into congestion as data fails to spark moves

The Canadian Dollar lost 0.4% against the Greenback, pushing USD/CAD back toward the 1.4400 handle.
Crude Oil prices fell on Thursday, driven down as Houthis are expected to suspend attacks on shipping containers soon.
Declines in barrel prices could be pushing the Loonie lower as CAD markets struggle to find headlines to chew on.
The trading week will end with a whimper rather than a bang, with no impactful American session data on the economic docket for the remainder of the week.
Canadian Consumer Price Index (CPI) inflation figures loom ahead next week.

Canadian Dollar price forecast

USD/CAD continues to churn around the 1.4400 handle, as the Loonie remains unable to gather enough momentum and break out of a rough consolidation zone that has plagued the pair for the better part of a month. Excluding the pandemic era of global Greenback dominance, USD/CAD is trading into its highest bids since 2016.

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.

18:28

US Dollar lost ground after fresh data, yields continue their slide

US Retail Sales from December underperformed, weekly Initial Jobless Claims rose.
Traders monitor President-elect Trump’s policies and potential tariff shifts, adding uncertainty to the global economic picture.
Mixed data releases prompt investors to reassess near-term rate expectations, but the Greenback’s longer-range trajectory remains constructive.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, extended its correction around the 109.00 level on Thursday. This week’s subpar performance stems primarily from declining US Treasury yields, which undermined the Greenback’s appeal mainly due to soft data from December.

Daily digest market movers: USD remains soft after mid-tier data

December Retail Sales underperformed slightly, rising just 0.4% instead of the anticipated 0.6%. Meanwhile, November’s result got revised from 0.7% to 0.8%.
Weekly Initial Jobless Claims for mid-January came in at 217K, a marked increase relative to the prior revised 203K figure.
Philadelphia Fed Manufacturing Survey surprised to the upside at 44.3, improving from the previous -16.4 (subsequently revised to -10.9), and well above the anticipated -5.0.
NAHB Housing Market Index for January is projected at 45, slightly down from 46, signaling modest headwinds in the housing sector.
Equity markets slipped on Thursday as traders locked in profits related to softer inflation plays from Wednesday.
Fed expectations remain anchored by CME FedWatch Tool data, indicating a 97.3% likelihood of unchanged policy at this month’s meeting.
Benchmark yields dipped with the 10-year Treasury note retreating to around 4.65%, down from its 4.80% peak on Tuesday.

DXY technical outlook: Brief respite but overall picture still leans bullish

The US Dollar Index remains under pressure below 109.00 after this week’s yield-driven retreat. Profit-taking has contributed to recent losses, but the longer-term outlook stays favorable as the DXY hovers near multi-year peaks.

Significantly, the 20-day Simple Moving Average (SMA) rejected deeper selling and stands as a robust support line for bullish traders. While near-term pullbacks are possible, especially if more US data surprises to the downside, the Greenback’s overarching uptrend could quickly reassert itself as markets weigh persistent inflation and the Fed’s gradual policy approach.

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.

17:25

Mexican Peso plunges to three-day low ahead of Trump’s inauguration

Mexican Peso weakens amid US economic data releases and upcoming political events.
Mexico's Gross Fixed Investment shows a slight October improvement, still below past highs.
Fed Governor Waller suggests more aggressive rate cuts may depend on future economic data.

The Mexican Peso (MXN) tumbled to a three-day low against the US Dollar (USD) as traders digested economic data released in the United States (US) and as financial markets prepared for US President-elect Donald Trump’s inauguration next week. The USD/MXN trades at 20.80, gaining over 1.30%.

Mexico’s economic docket in the week revealed that Gross Fixed Investment improved in October, coming at 0.1% MoM, up from a contraction of 0.7% in November’s data. Yet the figures reported by the Instituto Nacional de Estadistica Geografia e Informatica (INEGI) remained anemic against double-digit figures revealed in April 2024.

In the US, December Retail Sales revealed by the US Census Bureau remained solid despite missing projections, yet an upward revision to November figures indicates the economy remains healthy.

Meanwhile, Federal Reserve (Fed) Governor Christopher Waller was dovish during an interview with CNBC, stating that the US Central Bank may cut rates sooner and faster than projected if data warrants it.

Ahead this week, Mexico’s economic docket remains absent, with investors awaiting next week's inflation data alongside Retail Sales. In the US, the schedule will feature housing data.

Daily digest market movers: Mexican Peso pressured by speculation on Trump’s policies

The Mexican Peso will remain pressured the closer we get to Trump’s inauguration, as there are fears that he will impose tariffs and a harsh immigration policy.
Additionally, the divergence between the Banco de Mexico (Banxico) and the Fed favors further upside in the USD/MXN, as the interest rate differential would reduce by 150 bps.
According to the latest Citi private economists survey, Banxico is expected to cut rates by 200 basis points in 2025. The Fed projected to cut 50 bps, according to the latest Summary of Economic Projections (SEP).
US Retail Sales for December rose by 0.4% Month over Month, missing the mark. However, an upward revision of November figures to 0.8% showed the economy remains robust.
Initial Jobless Claims for the week ending January 10 increased by 217K from 203K the previous week, missing estimates of 210K.
Money market futures had priced in 40 bps of Fed rate cuts in 2025, according to CME FedWatch Tool data.

USD/MXN technical outlook: Mexican Peso plummets as USD/MXN climbs above 20.80

On Thursday, the exotic pair resumed its uptrend, with traders eyeing the year-to-date (YTD) peak at 20.90. At the time of writing, the USD/MXN faces strong resistance at 20.86, the January 13 high, ahead of the latter. An additional upside is seen, once those levels are cleared, with the next key resistance levels emerging at 21.46, the March 8, 2022 peak, followed by 21.50 and the 22.00 psychological level.

On the other hand, if USD/MXN clears the 50-day Simple Moving Average (SMA) at 20.34, this will expose the 100-day SMA at 20.00, followed by the October 18 swing low of 19.64.

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.

17:16

Dow Jones Industrial Average turns tepid on Thursday

The Dow Jones is holding near key moving averages on Thursday.
Markets were largely unimpressed with US Retail Sales figures.
Investors continue to hinge their exposure on Fed rate cut expectations.

The Dow Jones Industrial Average (DJIA) struck a middling tone on Thursday, churning around the 43,200 handle. Price action is hung up on the 50-day Exponential Moving Average (EMA), and investors await any sign of data that could signal a faster pace of rate cuts from the Federal Reserve (Fed).

Retail Sales figures moderated in December, easing back to 0.4% MoM in the headline figure. Markets expected a tick down to 0.6% from the previous month’s revised 0.8%. Core Retail Sales excluding automotive expenditures rose to 0.4% MoM from 0.2%, meeting median analyst forecasts. The mixed figures failed to spark significant changes in investor sentiment in either direction, and bidding action is muddling through a largely non-starter of a day for equities.

Despite overall middling action in equity markets, things are moving behind the scenes as traders jostle for position based on Fed rate cut expectations. Treasuries pulled back sharply earlier this week, and according to the CME’s FedWatch Tool, rate markets are now pricing in slightly more than even odds of the Fed delivering another quarter-point rate cut on May 7, a step closer than the previous middle ground of June 18.

Dow Jones news

The Dow Jones is taking a bit of a breather after a three-day bull run that saw the major equity index recover nearly 4% after kicking off the trading week near its lowest bids since October. The majority of the Dow’s listed equities are testing into the green on Thursday, but concentrated losses in key stocks are hobbling the average’s overall performance.

UnitedHealth Group (UNH) tumbled 4.5%, falling below $520 per share after the major health sector player missed analyst revenue expectations, reporting fourth-quarter income of $100.8 billion dollars, growing by 6.8% YoY. Wall Street expected at least %101.6 billion in revenue in Q4.

Apple (AAPL) is also shedding weight on the day, falling 3% and declining to $230 per share after it was revealed the tech megagiant is losing market share in Asian consumer arenas as upstart competitors take advantage of localized government subsidies. Apple still remains the preeminent name to beat in the smartphone market, but it lost market share in mainland China for the first time since 2023 even as overall consumer demand in the region saw growth for the first time in two years.

Dow Jones price forecast

Investors continue to bolster the Dow Jones back into the high end, determined to keep price action bolstered north of the 50-day EMA near 43,000. The Dow is testing the waters near 43,200 as major price levels rotate to provide technical support through intraday chart action.

Despite a near-term turnaround, bulls are showing some signs of exhaustion, and the Dow Jones remains down nearly 4% from record highs set back in November. DJIA is still running well north of its 200-day EMA which is climbing above 41,000, but a deepening pattern of swing lows may imply that the race could be coming to an end.

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.

16:32

United States 4-Week Bill Auction fell from previous 4.245% to 4.24%

16:15

EUR/USD Price Analysis: 20-day SMA failures weigh on upside attempts EURUSD

EUR/USD slips 0.23% on Thursday, trading near 1.0270 after losing momentum from a brief uptick.
MACD histogram shows rising green bars, hinting at modest buyer interest despite broad headwinds.
RSI stands at 43 in negative territory, suggesting only a mild rebound within a prevailing bearish environment.

The EUR/USD pair found some footing on Thursday but still retreated by 0.23% to hover around 1.0270. Although buyers tried to push prices higher in early trade, their efforts were undermined by the failure to sustain a break above the 20-day Simple Moving Average (SMA). This inability to clear key technical barriers highlights the pair’s fragile recovery prospects.

On the technical side, the Moving Average Convergence Divergence (MACD) indicator continues to display rising green bars, indicating that buying pressure has not completely faded. Yet, the Relative Strength Index (RSI), currently at 43, remains in negative territory despite its recent climb, emphasizing the cautious tone surrounding the euro. Unless the pair can overcome persistent resistance around the 20-day SMA, bullish enthusiasm is likely to remain muted.

Looking toward possible inflection points, initial support appears near 1.0250, with a drop below that threshold opening the door to the 1.0220 region. Conversely, a decisive push above the 1.0300 handle would be required for buyers to gain meaningful momentum, potentially setting the stage for a challenge of the 1.0350 barrier if sentiment improves further.

EUR/USD daily chart

15:30

United States EIA Natural Gas Storage Change above expectations (-260B) in January 10: Actual (-258B)

15:00

United States Business Inventories meets forecasts (0.1%) in November

15:00

United States NAHB Housing Market Index above expectations (45) in January: Actual (47)

14:47

USD/CAD jumps to near 1.4400 as US Dollar rises ahead of Trump’s inauguration USDCAD

USD/CAD rises to near 1.4400 as the US Dollar gains amid uncertainty over US Trump’s return to the White House.
The US Dollar rises despite weak US Retail Sales for December and a sharp growth in Initial Jobless Claims.
Investors expect the BoC to slow down the pace of winding up policy restrictiveness.

The USD/CAD pair climbs to near the key resistance of 1.4400 in Thursday’s North American session. The Loonie pair strengthens as the US Dollar (USD) recovers Wednesday’s losses, with investors turning cautious ahead of President-elect Donald Trump’s swearing ceremony on January 20.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rises to near 109.25. The safe-haven appeal of the US Dollar has improved as investors expect that Trump will provide an updated tariff plan soon after returning to the White House. This scenario will boost economic growth and inflationary pressures in the United States (US), which would force the Federal Reserve (Fed) to follow a more gradual policy-easing approach.

Meanwhile, traders have accelerated Fed dovish bets after the release of the US Consumer Price Index (CPI) data for December. The data showed that the annual core reading grew at a slower pace of 3.2% than estimates and the prior release of 3.3%. Also, month-on-month core CPI rose expectedly by 0.2%, slower than the previous release of 0.3%.

In Thursday’s session, the US Initial Jobless Claims data for the week ending January 10 came in higher than projected. Individuals claiming jobless benefits for the first time came in higher at 217K than estimates of 210K and the former release of 203K. The US Retail Sales data for December grew moderately by 0.4%, compared to estimates of 0.6% and November's reading of 0.8%.

The Canadian Dollar (CAD) performs weakly as investors expect the Bank of Canada (BoC) to continue reducing interest rates. However, market participants expect the BoC to slow down the pace of dialing back policy restrictiveness as the recent labor market data for December remained upbeat. The Canadian economy added 90.9K workers in December, compared to 50.5K in November.

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.

14:44

Gold Price Forecast: XAU/USD rallies to one-month peak above $2,700

Gold rallies as U.S. Treasury yields dip after rising unemployment claims and strong consumer spending.
Retail sales up 0.4% MoM in December, November's figures revised up to 0.8%.
Expectations for 2025 Fed rate cuts grow, with two reductions anticipated by year-end.

Gold soared after economic data from the United States (US) showed that consumer spending remained solid, while the number of people filing for unemployment benefits rose. This weighed on US Treasury yields and boosted the precious metal, which traded above the $2,700 figure for the first time since December last year.

Gold ascends to new highs, surpassed $2,700 as trades eye further Fed rate cuts

The yellow metal and the Greenback are trending up after Retail Sales for December rose by 0.4% MoM, missing the mark, but an upward revision of November figures to 0.8% showed the economy remains robust. On the negative front, Initial Jobless Claims for the week ending January 11 increased by 217K from 201K in the previous week, missing estimates of 210K.

Even though Retail Sales were solid and the US Treasury yield remained firm, Bullion buyers remained in charge, driving prices higher. Wednesday’s US inflation figures increased the chances that the Federal Reserve (Fed) will further ease policy in 2025.

Market participants are pricing in near-even odds that the Fed would cut rates twice by the end of 2025 and see the first reduction in June.

Recent Fed speaking has shown that officials remained concerned about the upcoming Trump administration's policies, some of which, like applying tariffs, are inflation-prone.

Ahead this week the economic docket will feature housing data and the release of US Industrial Production data.

XAU/USD Price Forecast: Technical outlook

Gold’s uptrend is set to continue, but buyers will face key resistance at $2,726, the December 12 high. A breach of the latter will expose $2,750 and the record high of $2,790. Conversely, if XAU/USD slips below $2,700, a pullback is seen toward the January 13 swing low of $2,656.

Momentum favors further upside, as the Relative Strength Index (RSI) depicts.

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.

13:45

US: Initial Jobless Claims rose to 217K last week

Initial Jobless Claims surpassed consensus and increased to 217K.
Continuing Jobless Claims climbed to 1.859M in the week ending January 3.

US citizens filing new applications for unemployment insurance rose to 217K for the week ending January 10, as reported by the US Department of Labor (DoL) on Thursday. This print missed initial estimates and was higher than the previous week's tally of 203K (revised from 201K).

The report also highlighted a seasonally adjusted insured unemployment rate of 1.2%, while the four-week moving average retreated to 212.75K, marking a decrease of 750 from the prior week’s revised average.

Moreover, Continuing Jobless Claims went down by 18K to reach 1.859M for the week ending January 3.

Market reaction

The Greenback maintains the bullish bias in the low-109.00s when tracked by the US Dollar Index (DXY) amid the broad-based recovery in US yields.

13:41

US Retail Sales expanded 0.4% MoM in December

US Retail Sales rose less than expected in the last month of 2024.
The US Dollar reverses the weekly pullback and advances modestly.

US Retail Sales climbed by 0.4% in December, reaching $729.2 billion, according to the US Census Bureau's report on Thursday. This figure was lower than November’s 0.8% increase and came in short of market expectations of a 0.6% rise.

In addition, Retail Sales excluding Autos rose 0.4% during the same period, matching consensus and surpassing the previous 0.2% growth.

According to the report, “Total sales for the 12 months of 2024 were up 3.0% from 2023. Total sales for the October 2024 through December 2024 period were up 3.7% from the same period a year ago. The October 2024 to November 2024 percent change was revised from up 0.7% to up 0.8%.”

13:37

GBP eases after November GDP disappoints – Scotiabank

The Pound Sterling (GBP) quickly gave back yesterday’s gains made on the better-than expected CPI data and has slipped a bit more today after November GDP disappointed, rising 0.1% M/M, versus 0.2% expected, on weaker industrial activity, Scotiabank’s Chief FX Strategist Shaun Osborne notes, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Cable is testing minor support around 1.22

“Swaps reflect 23bps or so of easing anticipated for the February 6th policy decision now after BoE MPC member Taylor yesterday gave a little additional nudge to strengthening expectations of a cut by suggesting that the central bank may need to speed up easing this year in order to prevent a hard landing.”

“The GBP’s three-day rise from the 1.21 area has stalled and there is some risk that the rebound merely represented a mild correction in the downtrend ahead of renewed weakness. Cable is testing minor support around 1.22 as our session gets underway; weakness through here suggests a retest of 1.21—or lower—may follow. Resistance is 1.2310/20.”

13:33

EUR holds in tight, flat trading range – Scotiabank

The Euro (EUR) is little changed on the session, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Eurozone trade surplus grows

“The Eurozone’s November trade balance widened to EUR12.9bn in November, a larger surplus than forecast. Data showed a 1.6% increase in export growth to the US over the year and a near 7% drop in imports.”

“The bilateral surplus widened significantly (17%) from November 2023. These are trends that the incoming US president is likely to focus on.”

“The EUR has drifted sideways over the past few hours after peaking around 1.0350 yesterday. The solid, bull reversal from the 1.02 area noted earlier in the week remains intact but the rebound has stalled and the broader downtrend persists. A push above 1.0350 is needed to support a deeper rebound now. Support is 1.0180/00.”