EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Remains Under Pressure

Key Insights

• The U.S. dollar remains under pressure after the release of the NY Empire State Manufacturing Index.
• GBP/USD is testing multi-week highs near the 1.2300 level. 
• USD/JPY is stuck near 128.50 as traders wait for the BoJ Interest Rate Decision. 

U.S. Dollar Index Tests The 102 Level

U.S. dollar is losing ground against a broad basket of currencies as traders remain ready to bet on a less hawkish Fed.

NY Empire State Manufacturing Index missed expectations, highlighting recession risks. However, the report did put significant pressure on the American currency.

EUR/USD Pulls Back As Resistance At 1.0870 Stays Strong

EUR/USD has recently made another attempt to settle above 1.0870 but lost momentum and pulled back towards the 1.0820 level.

Today, EUR/USD traders focused on the Euro Area ZEW Economic Sentiment Index report. The report indicated that Economic Sentiment improved from -23.6 in December to 16.7 in January, compared to analyst consensus of -17. The strong pullback in the European natural gas prices boosted business mood.

While the report was bullish for the euro, traders contined to take profits after the recent rally and pushed EUR/USD towards the 1.0820 level. It looks that some traders believe that the ECB will be less hawkish than previously expected.

GBP/USD Tests Multi-Week Highs

GBP/USD has finally managed to settle above the 1.2200 level and is trying to climb above 1.2300.

Today, Claimant Count Change report showed that the number of people claiming for unemployment benefits in the UK increased by 19700 in December.

The report was mostly in line with the analyst consensus, and it looks that today’s move in GBP/USD was driven by the general weakness of the U.S. dollar.

USD/CAD Stays Close To The 1.3400 Level

USD/CAD continues to trade near the 1.3400 level after the release of Canada’s inflation reports. Inflation Rate declined from 6.8% in November to 6.3% in December. Core Inflation Rate decreased from 5.8% to 5.4%.

Other commodity-related currencies are gaining ground in today’s trading session. AUD/USD moved towards 0.6980, while NZD/USD rallied towards multi-week highs at 0.6435.

USD/JPY Traders Wait For BoJ Decision

USD/JPY is currently trading near the 128.50 level as traders wait for the BoJ Interest Rate Decision, which will be released on Wednesday. Most likely, trading will stay choppy ahead of this key event.

For a look at all of today’s economic events, check out our economic calendar.