Here’s what you need to know on Friday, January 23rd.
US President Donald Trump seems to have eased his cautious approach after confirming an agreement with NATO on a “framework for a future agreement on Greenland.” Following his meeting with NATO Secretary General Mark Rutte in Switzerland, Trump backed away from his threat to impose tariffs on eight European nations set to begin on February 1.
The DXY is hovering around 98.40 but has been sliding despite some encouraging US data. The Personal Consumption Expenditure (PCE) figures for October and November were pretty much as expected, indicating that domestic inflation is slightly above what the Federal Reserve aims for, yet it’s not at alarming levels. Moreover, the third-quarter Gross Domestic Product (GDP) has been adjusted upward from 4.3% to 4.4%. This change has led to the complete removal of expectations for a rate cut during the meetings on January 27-28.
AUD/USD is currently trading near 0.6840, which is close to its October 2024 peak, as the Australian dollar strengthens against a weaker US dollar.
EUR/USD is around 1.1740, pulling back slightly from earlier gains but still generally trending upwards during the US trading session.
As for USD/JPY, it’s stable at approximately 158.30, showing little fluctuation for the third session in a row as the market awaits the Bank of Japan’s monetary policy statement due Friday morning in Asia.
Gold has made headlines by reaching a new peak above $4,920, trading at that level even as investor sentiment seems to improve, likely due to a de-escalation of tensions between the US and Europe over Greenland discussions.
What’s next:
The Reserve Bank of New Zealand (RBNZ) is set to release Consumer Price Index data along with the S&P Purchasing Managers’ Index (PMI) later today. Japan will also be releasing its national CPI data soon.
Friday’s Asian session should see the Bank of Japan making its monetary policy announcement, along with a statement and press conference.
Preliminary PMI figures for Germany and the euro area from Hamburg Commercial Bank (HCOB) will come out at the start of European trading on Friday, along with UK and US S&P PMI for January.
