After weakening against major rivals on improving risk mood and disappointing US data on Tuesday, the US dollar struggles to hold its ground early Wednesday, while investors continue to scrutinise comments from central bank officials throughout the day
Later Wednesday, the US economic calendar will feature ADP Employment Change and ISM Services Purchasing Managers Index (PMI) data for January.
The DXY Dollar Index lost about 0.4% on Tuesday after the US Bureau of Labor Statistics reported that JOLTS job openings declined to 7.6 million in December, falling short of the market expectation of 8 million.
Additionally, Wall Street’s main indexes gained traction after the opening bell, pointing to a positive shift in market mood that didn’t allow the USD to stage a rebound. Early Wednesday, however, US stock index futures trade in negative territory.
During Asian trading on Wednesday, the US Customs and Border Protection issued a notice that additional US tariffs of 10% will apply to Hong Kong as well as mainland China. Meanwhile, the data from China showed that the Caixin Services PMI declined to 51 in January from 52.2 in December.
EURUSD benefited from the broad USD weakness and registered daily gains on Tuesday. The pair clings to small daily gains, but stays below 1.0400 in the European morning on Wednesday. Eurostat will publish Producer Price Index data for December later in the session.
Economy Minister Ryosei Akazawa noted on Wednesday that the government’s focus is to eradicate Japan’s deflationary mindset.
“With an ambitious goal to boost minimum wages, the government is trying to eradicate deflationary mindset,” he added.
USDJPY remains under heavy bearish pressure to begin the European session and trades at its lowest level since mid-December near 153.00.
GBPUSD closed in positive territory for the second consecutive day on Tuesday. The pair is relatively quiet and fluctuates in a tight channel below 1.2500 in European trading on Wednesday.
Unemployment in New Zealand rose to 5.1% in the fourth-quarter from 4.8% in the third quarter, Statistics New Zealand reported on Wednesday, in line with the market expectation and failed to trigger a noticeable market reaction.
NZDUSD was trading marginally higher on the day, above 0.5650.
Gold preserves its bullish momentum and trades at a new all-time high above $2,860.
Escalating geopolitical tensions after US President Donald Trump proposed resettling Palestinians in neighbouring countries seem to be fuelling XAUUSD’s rally.
(Source: OANDA)
