Forex Today: FX board wakes up with US inflation at a 40-year high

Valeria Bednarik FXStreet

What you need to know on Thursday, January 13:

The greenback plummeted following the release of US inflation figures. The December Consumer Price Index was confirmed at 7% YoY, as expected, while the core reading beat expectations, up to 5.5%. The news, which usually spurs risk aversion, had the opposite effect this time.

Stocks rallied, although indexes gave up gains unevenly ahead of the close, while government bond yields ticked lower, sending the American dollar in a selling spiral, exacerbated by the breakout of technical levels.

The EUR/USD pair trades at its highest in two months at around 1.1450, while GBP/USD jumped to 1.3710, its highest since October. Commodity-linked currencies were also on the run, with AUD/USD trading in the 0.7280 region as USD/CAD flirting with 1.2500.

The dollar lost ground vs safe-haven assets also, as the USD/JPY pair plunged to 114.37, holding nearby heading into the Asian opening.

Gold advanced modestly, as investors looked for high-yielding assets. The bright metal trades around $1,827 a troy ounce. Crude oil prices were also up, with WTI trading at $82.60 a barrel.

Ethereum price gears up for explosive rally as buying activity accelerates

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD stays below 1.1850 after dismal German sentiment data

EUR/USD stays in negative territory below 1.1850 in the second half of the day on Tuesday. Renewed US Dollar strength, combined with a softer risk tone keep the pair undermined alongside downbeat German ZEW sentiment readings for February.

GBP/USD falls toward 1.3550, pressured by weak UK jobs report

GBP/USD remains under bearish pressure and extends its decline below 1.3600 on Tuesday. The United Kingdom employment data suggested worsening labor market conditions, bolstering bets for a BoE interest rate cut next month and making it difficult for Pound Sterling to stay resilient against its peers.

Gold recovers modestly, stays deep in red below $4,950

Gold (XAU/USD) stages a rebound but remains deep in negative territory below $4,950 after touching its weakest level in over a week near $4,850 earlier in the day. Renewed US Dollar strength makes it difficult for XAU/USD to gather recovery momentum despite the risk-averse market atmosphere.

Canada CPI expected to show sticky inflation in January, still above BoC’s target

Economists see the headline CPI rising by 2.4% in a year to January, still above the BoC’s target and matching December’s increase. On a monthly basis, prices are expected to rise by 0.1%.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Stellar mixed sentiment caps recovery

Stellar price remains under pressure, trading at $0.170 on Tuesday after failing to close above the key resistance on Sunday. The derivatives metric supports the bearish sentiment, with XLM’s short bets rising among traders and funding rates turning negative.