Forex News
- EUR/GBP trims earlier losses as dip buyers emerge near the 0.8650 region.
- A quiet macro calendar on both sides of the Channel keeps trading subdued.
- The broader technical structure remains bearish, with the pair trading near multi-month lows.
The Euro (EUR) recovers modestly against the British Pound (GBP) on Tuesday, trimming earlier losses after attracting dip-buying interest near the 0.8650 region. At the time of writing, EUR/GBP trades around 0.8664, holding close to multi-month lows amid a thin economic calendar on both sides of the Channel.
From a technical perspective, EUR/GBP remains within a well-defined downward-sloping channel that has guided price action since November 2025, keeping the broader bias tilted to the downside.
The 21-day Simple Moving Average (SMA) has slipped below the 50-day SMA, and both are trending lower, underscoring persistent selling pressure.
On the upside, the 0.8700 psychological level caps immediate recovery attempts. A sustained break above this zone would shift focus toward the upper boundary of the descending channel, which aligns closely with the 21-day SMA. A clear move beyond this confluence would start to weaken the bearish structure and allow for a deeper corrective bounce.
On the downside, a decisive break below the 0.8650 region would strengthen bearish momentum and increase the risk of a continuation toward the 0.8600 handle, a level last seen in August 2025.
Momentum indicators are showing early signs of stabilization. The Moving Average Convergence Divergence (MACD) remains below the signal line and the zero level, but the flattening histogram points to fading downside momentum.
Meanwhile, the Relative Strength Index (RSI) is hovering near 34 after recovering from oversold territory, suggesting scope for near-term consolidation.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
The Japanese Yen (JPY) fell 0.5% against the US Dollar (USD), underperforming all G10 currencies, as speculation over PM Takaichi’s snap election drove renewed selling and pushed USD/JPY toward levels last seen in early 2025, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
USD/JPY eyes 160-162 as market assesses Takaichi plans
"The yen is weak, down 0.5% vs .the USD and underperforming all of the G10 currencies with a clear extension of its latest bearish break and push through levels last seen in early 2025 to reach lows not seen since July 2024. Domestic developments are bearish as market participants assess the resurgence of political uncertainty amid reports of PM Takaichi’s plans to call a snap election."
"The PM’s high approval ratings appear to be motivating this decision as she would seek to strengthen her mandate and secure a single party majority. Takaichi is a fiscal and monetary dove, and Japanese bond yields have surged in response to these latest developments."
"The one-sided nature of the latest selloff in the yen is somewhat concerning and may prompt verbal intervention from the ministry of finance. Japan’s Finance Minister Katayama is said to have already spoken to Treasury Secretary Bessent. For USD/JPY, we now look to the psychologically important 160 level and the July 2024 high just below 162."
The Euro (EUR) is trading flat to the US Dollar (USD) and consolidating in a tight range following Monday’s attempt at a bullish reversal of the pullback from mid/late December, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
Sentiment drives Euro amid stable short-term rates
"Short-term rate expectations look to be finding some stabilization following their recent pullback, and spreads (vs. the US) are doing much of the same. EUR continues to be driven by sentiment as we note the strong correlation to movement in risk reversal, currently at 0.9 on a 21 day rolling basis."
"Short-and medium-term technical signals are neutral, as reflected in an RSI that continues to hover around the 50 threshold and a broader flat range that has defined much of the EUR’s price action since June."
"The recent pullback looks to have been halted by support at the 50 day MA (1.1657) and the local range looks to be defined by support at 1.1620 and 1.1800. We look to a near -term range bound between 1.1620 and 1.1720."
- Gold ticks higher after US inflation data as softer core CPI keeps Fed easing hopes alive.
- Safe-haven demand remains firm, underpinned by geopolitical tensions and uncertainty around Federal Reserve independence.
- Technically, the broader trend remains bullish, but near-term price action suggests a period of consolidation or pullback risk.
Gold (XAU/USD) edges modestly higher on Tuesday as traders react to the latest US inflation data. At the time of writing, XAU/USD trades around $4,615, up nearly 0.6%, just shy of Monday’s record high near $4,630.
Data released by the US Bureau of Labor Statistics (BLS) showed that headline Consumer Price Index (CPI) inflation came in broadly in line with expectations, while core inflation undershot expectations, keeping theFederal Reserve (Fed) inclined toward further monetary policy easing.
The precious metal remains underpinned by steady safe-haven demand as geopolitical and economic uncertainty keep investors cautious. Markets remain unsettled by the criminal investigation into Fed Chair Jerome Powell, which has revived concerns over the central bank's independence.
At the same time, risk sentiment has been hit by fresh geopolitical developments after US President Donald Trump threatened a 25% tariff on countries doing business with Iran amid nationwide anti-government protests.
This follows earlier US actions in Venezuela, where Washington carried out a military operation against President Nicolás Maduro, as well as Trump’s renewed rhetoric over strategic interests in Greenland.
Market movers: Markets jittery as DOJ probes Powell, Fed independence in focus
- The US Department of Justice issued grand jury subpoenas as part of a criminal investigation into Federal Reserve Chair Jerome Powell, linked to his Senate testimony on the Fed’s $2.5 billion headquarters renovation project. Powell said the move is politically motivated and stressed that the Fed will continue to set policy based on economic conditions rather than political pressure.
- Adding to concerns over Fed independence, US President Donald Trump is expected to announce a potential replacement for Jerome Powell later this month, with Powell’s term as Fed Chair ending in May 2026. Markets widely expect Trump to nominate a candidate more closely aligned with his policy views, reinforcing uncertainty around the future direction of US monetary policy.
- On the monetary policy front, markets are currently pricing in around two Fed rate cuts this year. However, last week’s US employment report showed the labour market is holding up better than many feared, tempering expectations for aggressive easing and reinforcing the view that the Fed can afford to keep interest rates unchanged at its January meeting.
- Attention also remains on the US Supreme Court, which is due to hold an opinion day on Wednesday on the legality of Trump-era tariffs. At the same time, the court is set to hear arguments on January 21 in the case over Trump’s attempt to remove Fed Governor Lisa Cook.
- Major investment banks remain broadly bullish on Gold’s outlook. Bank of America, JPMorgan, Goldman Sachs, Morgan Stanley and UBS expect prices to hold in the $4,500-$5,000/oz range through 2026, citing anticipated Fed rate cuts, rising debt concerns, steady central bank and ETF buying, and persistent geopolitical uncertainty, according to Reuters.
Technical analysis: Strong trend persists despite overbought conditions
On the 4-hour chart, the 21-period Simple Moving Average (SMA) has crossed above the 50-period SMA, with both indicators sloping higher, reinforcing the prevailing uptrend.
Price action remains comfortably above its key moving averages, with the 21-SMA near $4,534.94 acting as the first layer of dynamic support, followed by the 50-SMA around $4,468.91.
Momentum indicators remain constructive. The MACD is holding above its signal line in positive territory, while the modestly expanding histogram points to firm bullish momentum.
Meanwhile, the RSI stands at 70.88, flashing overbought conditions, which suggests the rally may pause or consolidate in the near term. Any pullback, however, could be viewed as corrective rather than trend-changing, keeping the broader technical bias tilted to the upside.
(The technical analysis of this story was written with the help of an AI tool.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- US headline CPI comes in line with expectations, while core inflation softened modestly.
- Tensions surrounding Fed independence continue to weigh on the US Dollar.
- The Swiss Franc benefits from geopolitical and institutional uncertainty.
USD/CHF trades around 0.7980 on Tuesday at the time of writing, up 0.10% on the day, but off its intraday high following the release of US inflation data. The pair reacted moderately to the macroeconomic figures, as markets remain torn between inflation data, which remains stable, and a political backdrop that continues to weigh on the US Dollar (USD).
The US headline Consumer Price Index (CPI) rose 2.7% YoY in December, according to the Bureau of Labor Statistics (BLS), matching November’s increase and fully in line with market forecasts. However, core Consumer Price Index, which excludes the volatile food and energy components, remained unchanged at 2.6% on an annual basis, missing expectations of an increase to 2.7%. On a monthly basis, headline CPI increased by 0.3%, while core CPI rose by 0.2%. The report highlights that shelter costs remain the main driver of monthly inflation, while food and energy prices also recorded moderate increases.
These figures reinforce the view of a gradual but incomplete disinflation process, leaving limited room for the Federal Reserve (Fed) to quickly alter its monetary policy path. Markets are now pricing in around a 95% chance that the Fed will keep interest rates unchanged at its January meeting, while expectations for a rate cut as early as March have dropped sharply in recent days, according to the CME FedWatch tool.
At the same time, labor market indicators are sending mixed signals. The four-week average of weekly private employment changes reported by Automatic Data Processing (ADP) edged up to 11,750 jobs per week in mid-December, from 11,000 previously. This confirms that job creation in the US private sector remains positive, but at a modest pace, insufficient to fully dispel concerns about an economic slowdown.
The US Dollar, however, remains undermined by non-economic factors. Reports of a criminal investigation targeting Fed Chair Jerome Powell have reignited concerns about the central bank’s independence. This situation is part of a long-running conflict between US President Donald Trump and the Fed Chair, fueling institutional unease that weighs on monetary policy credibility. Several major central banks have issued a joint statement in support of Jerome Powell, underlining the importance of central bank independence.
Credit rating agencies are closely monitoring developments. Fitch Ratings recalled that Federal Reserve independence is a key pillar supporting the US sovereign rating, while S&P Global Ratings also stressed that Fed credibility is a cornerstone of US institutional strength. These statements contribute to keeping a political risk premium embedded in the US Dollar.
In this environment, the Swiss Franc (CHF) continues to benefit from sustained safe-haven demand, driven by both geopolitical tensions and doubts surrounding US monetary governance.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.01% | -0.02% | 0.48% | -0.05% | 0.05% | 0.01% | 0.07% | |
| EUR | 0.01% | -0.01% | 0.50% | -0.04% | 0.05% | 0.03% | 0.08% | |
| GBP | 0.02% | 0.00% | 0.51% | -0.03% | 0.06% | 0.04% | 0.09% | |
| JPY | -0.48% | -0.50% | -0.51% | -0.52% | -0.42% | -0.46% | -0.40% | |
| CAD | 0.05% | 0.04% | 0.03% | 0.52% | 0.10% | 0.06% | 0.12% | |
| AUD | -0.05% | -0.05% | -0.06% | 0.42% | -0.10% | -0.03% | -0.00% | |
| NZD | -0.01% | -0.03% | -0.04% | 0.46% | -0.06% | 0.03% | 0.06% | |
| CHF | -0.07% | -0.08% | -0.09% | 0.40% | -0.12% | 0.00% | -0.06% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Platinum prices surged alongside Gold and Silver, narrowing its undervaluation relative to Gold, with the Gold/Platinum ratio now just under 2, a level last seen in June 2023, Commerzbank's commodity analyst Carsten Fritsch notes.
Industrial demand limits further Platinum upside
"The price of Platinum also rose sharply in the wake of Gold and silver. However, Platinum has not yet returned to the record level of $2,490 per troy ounce reached at the end of December. The Gold/Platinum ratio is now just under 2, which was last the case in June 2023. The Platinum price has thus significantly reduced its undervaluation relative to the Gold price."
"Further catching up with Gold is likely to become more difficult from now on, as Platinum, unlike Gold, is not a safe haven but is mainly dependent on industrial demand and thus on economic developments. In addition, according to the World Platinum Investment Council's forecast, the Platinum market is no longer likely to be undersupplied this year. Following the sharp rise in Platinum prices, we see only limited upside potential."
"The Platinum price should be trading at $2,600 by the middle of the year and $2,700 by the end of the year. This also applies to Palladium, whose price reached a three-year high of just over $1,980 per troy ounce at the end of December. Due to weakening demand from the automotive industry, by far the most important sector for Palladium demand, the upside potential for Palladium is likely to be even more limited. We expect the price of Palladium to reach $2,000 by mid-year and $2,100 by the end of 2026."
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