Forex Today: US Dollar mixed as financial markets return to normal

Valeria Bednarik FXStreet

What you need to take care of on Tuesday, January 3:

The US Dollar started the year advancing against most of its major rivals but ended it unevenly across the FX board. The EUR was the weakest, as EUR/USD retreated from the 1.0700 area towards the current 1.0650 price zone, while the AUD was the strongest, with AUD/USD holding above the 0.6800 threshold.

GBP/USD and USD/JPY finished Monday unchanged at 1.2045 and 130.75, respectively, while USD/CAD edged higher and settled at around 1.3560.

Most Asian stock markets remained closed, while some European ones were also inactive. The European benchmarks that actually operated on Monday posted modest gains. Wall Street remained closed.

There was no activity in bond markets, nor among commodities, with market players awaiting the next Asia opening for direction. Chances skew towards a downbeat mood after Chinese data released over the weekend indicated a steeper economic contraction in December 2022.

The macroeconomic calendar will include some interesting releases this week, with EU and German inflation updates and the S FOMC Meeting Minutes. On Tuesday, Germany will publish the preliminary estimate of the December Consumer Price Index, foreseen up by 10.7% YoY. Next Wednesday, the US will release employment figures, while the December Nonfarm Payroll report is scheduled for Friday.

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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 looks sidelined around 1.1850

EUR/USD remains on the back foot, extending its bearish tone and sliding towards the 1.1850 area to print fresh daily lows on Monday. The move lower comes as the US Dollar gathers modest traction, with thin liquidity and subdued volatility amplifying price swings amid the US market holiday.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.