Forex Today: Gold sets new record-high, majors stay quiet ahead of inflation data
Here is what you need to know on Friday, January 31:
Major currency pairs trade in narrow ranges early Friday, following some volatility seen on Thursday. Regional and nation-wide inflation data from Germany and December Personal Consumption Expenditures (PCE) Price Index data from the US will be watched closely by market participants on Friday. Fourth-quarter Employment Cost Index data will also be featured in the US economic calendar ahead of the weekend.
US Dollar PRICE This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.83% | 0.40% | -0.62% | 0.50% | 1.32% | 0.89% | 0.41% | |
| EUR | -0.83% | -0.35% | -1.30% | -0.18% | 0.50% | 0.19% | -0.31% | |
| GBP | -0.40% | 0.35% | -1.25% | 0.18% | 0.85% | 0.56% | 0.04% | |
| JPY | 0.62% | 1.30% | 1.25% | 1.17% | 2.13% | 1.76% | 1.18% | |
| CAD | -0.50% | 0.18% | -0.18% | -1.17% | 0.62% | 0.39% | -0.13% | |
| AUD | -1.32% | -0.50% | -0.85% | -2.13% | -0.62% | -0.27% | -0.76% | |
| NZD | -0.89% | -0.19% | -0.56% | -1.76% | -0.39% | 0.27% | -0.73% | |
| CHF | -0.41% | 0.31% | -0.04% | -1.18% | 0.13% | 0.76% | 0.73% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The European Central Bank (ECB) announced on Thursday that it lowered key rates by 25 basis points (bps) as expected. The ECB didn't make any significant changes to its policy statement and ECB Christine Lagarde refrained from committing to the next rate move, reiterating that their next decision will be driven by data and analysis. After rising above 1.0450 in the second half of the day, EUR/USD lost its traction and retreated below to close in negative territory on Thursday. Early Friday, the data from Germany showed that Retail Sales declined by 1.6% on a monthly basis in December, missing the market expectation for an increase of 0.2%. EUR/USD showed no immediate reaction to this data and was last seen trading in a narrow channel at around 1.0400.
The US Bureau of Economic Analysis (BEA) reported on Thursday that the US' Gross Domestic Product expanded at an annual rate of 2.3% in the fourth quarter. This reading followed the 3.1% expansion recorded in the third quarter and came in below the market estimate for a growth of 2.6%. On a positive note, weekly Initial Jobless Claims in the US declined to 207,000 in the week ending January 25 from 223,000 in the previous week. The US Dollar (USD) Index held its ground after mixed data and posted modestly gains on Thursday. Early Friday, the index stays in a consolidation phase near 108.00.
Meanwhile, US President Donald Trump took to social media late Thursday to make a fresh tariff threat against Canada and Mexico. According to President Trump's social media post, the US is set to impose a flat 25% import tax "because of fentanyl" on all goods crossing the border into the US from Canada or Mexico. Trump also warned that they could impose 100% tariffs on BRICS nations if they were to try to replace the USD with a new currency in international trade.
Bank of Japan (BoJ) Governor Kazuo Ueda said on Friday that underlying inflation is still somewhat below 2%. Ueda added that the Japanese central bank would maintain an accommodative policy to support price trends. After losing more than 0.5% on Thursday, USD/JPY stages a rebound and trades in positive territory above 154.50.
GBP/USD closed modestly lower on Thursday after meeting resistance above 1.2450. The pair clings to small daily gains on Friday but remains below 1.2450.
Gold gathered bullish momentum and rose more than 1% on Thursday. Gold continued to stretch higher and trades at an all-time peak near $2,800.
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