The USD/JPY pair extends the rally to around 156.85 during the early Asian session on Thursday. The Japanese Yen (JPY) weakens to a two-week low against the US Dollar (USD) amid concern over Japan's fiscal health under Prime Minister Sanae Takaichi's expansionary spending policy.
US Federal Reserve (Fed) Governor Lisa Cook said on Wednesday that risks are skewed toward higher inflation, adding that she’s optimistic about inflation's path yet cautious and vigilant.
Silver price extended its recovery for the second straight day, up by 3.75% shrugging off broad US Dollar strength, following the release of solid US economic data. At the time of writing, XAG/USD trades at $88.20, after bouncing off daily lows of $83.28.
The Australian Bureau of Statistics will publish its data for December on Thursday at 00.30 GMT. Australia’s Trade Surplus is expected to widen to 3,300M MoM in December, compared to 2,936M in November.
GBP/USD remains trapped in a near-term cycling pattern on Wednesday, continuing to churn aimlessly between 1.3700 and 1.3650.
The Euro falls during the North American session, down more than 0.10% as the Dollar recovers from Tuesday’s losses. Solid US business activity data is a headwind for the EUR/USD pair.
The Korean Won is under pressure despite a benign macro backdrop, with recent GDP data showing contraction. The Bank of Korea is expected to maintain its policy rate amid rising home prices and volatility in the KRW.
United States (US) ADP Employment Change report revealed that the private sector added 22K jobs in January, falling short of expectations of 48K.
The Canadian Dollar (CAD) held steady against the US Dollar (USD) on Wednesday, trading just below 1.3700 as markets adjusted to the end of the partial US government shutdown and digested a soft private payrolls report.
OCBC Bank's report, authored by Sim Moh Siong and Christopher Wong, discusses the recent rally of the Indian Rupee (INR) following headlines of a US-India trade deal. However, the report cautions that the lack of specifics may limit follow-through as investors return to fundamentals.
Gold price retreats during the North American session on Wednesday, down more than 1% after reaching a three-day high of $5,091. A mixed market mood and modest US Dollar strength keep XAU/USD trading with losses at around $4,901 at the time of writing.
EUR/USD trades mostly flat on Wednesday, drifting around 1.1800 during the European and American sessions. Fiber pulled back from last week's four-year high near 1.2082 but continues to hold comfortably near the 1.1800 handle.
The Dow Jones Industrial Average (DJIA) climbed about 600 points, or 0.6%, and tapped the 49,600 region on Wednesday, gaining ground on the back of climbing pharmaceutical stocks.
Standard Chartered's report, authored by Carol Liao, Senior Economist and Moriarty Lam, Research Analyst, highlights that China's household consumption is likely underestimated due to unaccounted government transfers and strong RMB purchasing power.
NZD/USD trades around 0.6000 on Wednesday at the time of writing, down 0.90% on the day, as investors digest mixed New Zealand labor market data and an uncertain global macroeconomic environment.
In their latest report, TD Securities analysts Prashant Newnaha and Alex Loo argue that fears surrounding Japan's fiscal outlook are exaggerated. They highlight that Japan's Gross Debt to GDP ratio is misleading due to significant government assets.
The CAD is experiencing slight softness in quiet trading, primarily due to a stronger USD. The CAD's fair value estimate has increased slightly, reflecting a minor upward adjustment, note Scotiabank's Shaun Osborne and Eric Theoret.
The preliminary estimate for January Eurozone HICP inflation eased to 1.7% y/y, down from 1.9% in December, aligning with expectations. Core inflation also fell to 2.2% y/y. The ECB is expected to keep interest rates unchanged amid concerns about inflation undershooting its target.
Despite the weakened Danish Krone (DKK) against the Euro (EUR), the Danish central bank has not intervened in the foreign exchange market, indicating that the current interest rate spread will likely remain unchanged.
The Pound Sterling (GBP) drops against the US Dollar (USD) on Wednesday, and it remains trading below the 1.3700 figure, posting losses of 0.23% as traders wait for the Bank of England’s (BoE) monetary policy decision.
Silver (XAG/USD) extends its rebound for a second consecutive day and trades around $89.70 at the time of writing, up 5.50% on the day.
The Riksbank has decided to keep its policy rate unchanged at 1.75%, citing solid economic growth and rising household consumption. Despite a weak labor market, inflation has reached target levels, allowing the Riksbank to adopt a wait-and-see approach.
Economic activity in the US service sector remained unchanged in January, with the ISM Services PMI holding steady at 53.8. The print, however, came in above analysts' expectations of 53.5.
The report from Brown Brothers Harriman (BBH) indicates that the USD is trading firmly against most major currencies, with Treasury yields ticking up. In the near term, the USD has room to retrace some of its recent losses as the Fed is not in a rush to ease policy.
The EUR is slightly down against the USD, showing signs of consolidation as it approaches the ECB's policy decision. Recent economic data, including services PMI and CPI, have aligned with expectations, providing little impetus for ECB policymakers.
Inflation in the Euro-area has decreased to 1.7% y/y in January, while core inflation remains stable at 2.2%. ECB is expected to maintain its current policy stance due to the calm inflation outlook, despite some uncertainty from volatile energy prices.
USD/CHF trades without a clear trend around 0.7750 on Wednesday at the time of writing, showing an almost unchanged performance on the day. The pair remains trapped in a narrow range as the US Dollar (USD) struggles to find a clear catalyst following the release of mixed US macroeconomic data.
Deutsche Bank Research Team highlights a recurring market pattern in 2026 characterized by sharp sell-offs followed by rapid recoveries. Despite various causes for these sell-offs, they have not resulted in lasting damage, with the S&P 500 showing resilience.
Private sector employment in the US rose 22,000 in January, and annual pay was up 4.5%, the Automatic Data Processing (ADP) Research Institute reported on Wednesday.
TD Securities analysts anticipate that the Bank of England's Monetary Policy Committee will maintain the Bank Rate at 3.75% with a 6-3 vote. The report highlights that the trajectory of inflation and the voting dynamics will be crucial for market movements.
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