Forex News
- The Japanese Yen firms modestly as political uncertainty around the Fed weighs on the US Dollar.
- USD/JPY consolidates near multi-month highs within a well-defined daily uptrend.
- A break above 158.20 could open the door toward the 160.00 psychological level.
The Japanese Yen (JPY) gains modest ground against the US Dollar (USD) at the start of the week as the Greenback comes under pressure across the board, following reports of a criminal probe involving Federal Reserve (Fed) Chair Jerome Powell that have unsettled market sentiment.
At the time of writing, USD/JPY trades around 157.75, holding close to its highest level since January 2025. The pair lacks strong follow-through selling, with Japan-China tensions and speculation over a possible snap election in Japan’s lower house keeping the Yen on the defensive.
That said, the upside in USD/JPY also appears capped for now, as sustained weakness in the Yen could revive intervention risks, with the currency hovering near levels that previously prompted both verbal and direct intervention from Japanese authorities.
From a technical perspective, USD/JPY remains in a steady uptrend, trading well above its key moving averages on the daily chart. The 21-day Simple Moving Average (SMA), near 156.48, is acting as immediate support.
A decisive break below this level could expose the December low around 154.50, followed by a strong demand zone near 153.00, which closely aligns with the 100-day SMA at 152.73.
On the upside, the 157.80-158.20 region continues to cap gains, as reflected in the rejections seen in November and December. A sustained break above this zone would strengthen bullish momentum and open the door toward the 160.00 psychological mark, last seen in July 2024.
Momentum indicators support the upside bias. The Moving Average Convergence Divergence (MACD) histogram has turned positive near the zero line, with the MACD line above the signal line, pointing to improving bullish momentum.
Meanwhile, the Relative Strength Index (RSI) stands at 62, remaining in bullish territory without flashing overbought conditions.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- EUR/USD resumes its recovery and approaches the 1.1700 area.
- Eurozone Sentix data has shown a significant improvement in investors' confidence
- Concerns about the Fed's independence are hammering confidence in the US Dollar.
EUR/USD is trading near 1.1690 at the time of writing, 0.4% higher on daily charts after bouncing from one-month lows at the 1.1620 area earlier on the day. An upbeat Eurozone Sentix Consumer Sentiment Index and a weak US Dollar (USD) amid renewed attacks from the US government against the Federal Reserve Chairman Jerome Powell have been underpinning demand for the Euro (EUR) on Monday.
The New York Times has reported on Sunday that Powell is under criminal investigation for his testimony before the Senate Committee regarding renovations to a Federal Reserve building. Powell has responded with a video, stating that the investigation is “unprecedented” and framing it as a series of threats aimed at bending the central bank's arm into lowering interest rates.
Apart from that, violence has escalated in Iran, where the regime is reported to have killed hundreds of protesters this weekend, with the Threat of a US intervention looming.
The economic calendar is thin on Monday, but in this context, the speech from Atlanta Fed President Raphael Bostic will be observed with particular interest. Later this week, the release of the US Consumer Price Index (CPI) data, due on Tuesday, and a slew of speeches from Fed Officials might shed more light on the Fed's interest rate-cut path.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.40% | -0.46% | -0.02% | -0.27% | -0.31% | -0.49% | -0.41% | |
| EUR | 0.40% | -0.05% | 0.39% | 0.13% | 0.10% | -0.08% | -0.01% | |
| GBP | 0.46% | 0.05% | 0.45% | 0.19% | 0.16% | -0.03% | 0.04% | |
| JPY | 0.02% | -0.39% | -0.45% | -0.26% | -0.29% | -0.48% | -0.40% | |
| CAD | 0.27% | -0.13% | -0.19% | 0.26% | -0.03% | -0.22% | -0.14% | |
| AUD | 0.31% | -0.10% | -0.16% | 0.29% | 0.03% | -0.19% | -0.12% | |
| NZD | 0.49% | 0.08% | 0.03% | 0.48% | 0.22% | 0.19% | 0.07% | |
| CHF | 0.41% | 0.00% | -0.04% | 0.40% | 0.14% | 0.12% | -0.07% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily Digest Market Movers: US Dollar remains vulnerable with Fed's independence into question
- The criminal probe against Fed Chairman Powell marks a new stage in the unprecedented political pressures on the central bank and a message to the next Fed chair. This undermines the central bank's independence to set its monetary policy and erodes the US Dollar's status as a reserve currency.
- Meanwhile, tensions in Iran continue growing. News reported that the Islamic regime's response to the protests in the country has caused hundreds of deaths, and Tehran has threatened to target US military bases if they detect signs of an impending attack.
- On the macroeconomic front, the Eurozone's Sentix Economic Confidence Index has improved to a reading of -1.8 in January from -6.2 in December. This is the best performance in the last six months and marks a significant improvement in investors' sentiment about the region's economy. The impact on the Euro (EUR), however, has been marginal.
- US data released on Friday revealed that the US labour market remains stalled but not deteriorating further. The jobless rate declined beyond expectations, adding to the case that the Fed will keep interest rates unchanged at its next monetary policy meeting, due on January 27 and 28.
- Beyond that, January's preliminary Michigan Consumer Sentiment Index rose to 54.0, from 52.9 in December, beyond the 53.5 reading expected by the market. These figures show the second consecutive improvement, which points to a stronger economic outlook and supports the idea of a steady monetary policy at January's Fed meeting.
Technical Analysis: EUR/USD recovery is likely to be tested at the 1.1700 area
EUR/USD has bounced up strongly from one-month lows at the 1.1620 area. The pair remains trading within a descending channel from late-December highs, but technical indicators on the 4-hour chart have turned higher.
The Moving Average Convergence Divergence (MACD) line has crossed above the signal line, hinting at a fading bearish pressure, while the Relative Strength Index (RSI) has breached the key 50 level, signaling some momentum improvement.
On the upside, the pair is likely to find significant resistance at the confluence of the channel's top with the January 7 high, near 1.1700. Above here, the target is the January 6 high, at 1.1742. To the downside, the pair has a significant support above 1.1615 (December 8 and 9 lows) ahead of the December 2 low, near 1.1590.
(The technical analysis of this story was written with the help of an AI tool.)
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.
Outlook for USD is neutral now; it is likely to trade between 6.9660 and 7.0160, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Outlook for USD/CNH remains neutral for now
24-HOUR VIEW: "We expected USD to 'trade in a range between 6.9740 and 6.9900' last Friday. USD subsequently traded between 6.9721 and 6.9841, closing largely unchanged (6.9777, -0.07%). The underlying tone has softened somewhat, but this is likely to lead to USD trading range of 6.9700/6.9860 rather than a continued decline."
1-3 WEEKS VIEW: "Last Thursday (08 Jan, spot at 6.9900), we highlighted 'the outlook for USD is neutral now', and we expected it to 'trade between 6.9660 and 7.0160'. Our view remains unchanged."
- USD/CAD reversal from 1.3915 highs holds above 1.3860.
- The Canadian Dollar is failing to draw significant support from the US Dollar's weakness.
- A moderate pullback in Oil prices is adding pressure on the Loonie.
The US Dollar is trading lower across the board, weighed by fresh concerns about the US Federal Reserve’s (Fed) independence. The USD/CAD reversal, however, has remained limited, with downside attempts held above 1.3860 so far, which keeps the bullish trend from December lows intact.
A New York Times report stating that the US Government initiated a criminal probe against Fed President Jerome Powell resurfaced concerns about the ability of the US central bank to act independently, and sent the US Dollar lower against its main peers during Monday's Asian session.
Fed president Jerome Powell echoed those worries in a video statement released shortly after the news, where he observed that these actions are “unprecedented” and a part of a broader US government campaign aimed at bending the central bank’s arm into lowering borrowing costs.
Oil prices remain close to long-term lows
A mild pullback in Oil prices is also weighing on the Canadian Dollar’s recovery. The US benchmark WTI Oil dropped about $1 to $58.60 from session highs at $59.60 earlier on the day. Crude prices, Canada’s main export, have appreciated about 2% from January 1 but remain 23% below their June 2025 peak.
On the macroeconomic front, US data was fairly positive on Friday. The unemployment rate dropped beyond expectations, while the Michigan Consumer Sentiment Index improved, easing pressure on the Fed to cut interest rates immediately.
In Canada, December’s employment data was mixed. Net employment increased by 8,2K against expectations of a 5K decline, but the jobless rate rose to 6.8% from 6.5% surpassing the market consensus of a milder rise, to 6.6%.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
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Markets await the announcement of the next Federal Reserve Chair, with limited USD impact so far as the FOMC is expected to provide balance against a potentially dovish appointee. While Fed credibility concerns may exert some downside pressure on the dollar, EUR/USD is likely to face resistance near 1.18, with choppy trading expected in the months ahead, Rabobank's FX analyst Jane Foley reports.
FOMC balance may temper dovish risks
"Last week, US Treasury Secretary Bessent indicated that the next Fed Chair will be announced this month. While the issue of Fed independence is of considerable concern to the markets, to date the impact on the USD has been limited by the view that the FOMC may be able to provide some degree of balance against a dovish chair. This outlook has found support in the fact that FOMC members have recently expressed a wide range of policy views."
"Also, since all the candidates that have been mooted for the job of the next Fed Chair have credibility as potential monetary policy makers, many commentators have maintained the view that evidence and economics will in any case continue to dominate the decisions of the Fed going forward. Others have argued that while the Fed may tolerate slightly higher inflationary pressures going forward, this will not translate to a complete loss of credibility for the central bank."
"In short, there is a spread of potential outcomes regarding the Fed credibility issue which may imply the potential for some downside pressure on the USD without sending it into free-fall. As the market awaits further clarity on the evolution of the Fed, we expect that EUR/USD1.18 is likely to pose as tough resistance. Overall, we expect the outlook for the currency pair in the months ahead to be dominated by choppy ranges."
Strong momentum indicates further US Dollar (USD) strength; deeply overbought conditions suggest that 158.90 is likely out of reach today. In the longer run, USD is likely to continue to rise; the level to watch is 158.90, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
USD/JPY is likely to continue to rise
24-HOUR VIEW: "When USD was at 156.85 in the early Asian trade yesterday, we noted 'a tentative increase in upward momentum'. We expected USD to 'drift higher” but we pointed out that “any advance is likely part of a higher range of 156.55/157.20'. The subsequent price movements did not turn out as expected. USD lifted off, broke above 157.20 and surged to a high of 158.18. Strong momentum indicates further USD strength, but deeply overbought conditions suggest that 158.90 is likely out of reach today. Any pullback today is likely to remain above 157.40, with minor support at 157.75."
1-3 WEEKS VIEW: "In our most recent narrative from last Wednesday (06 Jan, spot at 156.70), we highlighted that USD 'is likely to trade in a range for now between 155.60 and 157.50'. Last Friday, in a sudden move, not only did USD break above 157.50, but it also soared to a high of 158.18. With rapidly increasing upward momentum, USD is likely to continue to rise. The level to watch is last year’s high, near 158.90. We will remain positive on USD as long as it holds above the ‘strong support’ level, currently at 157.00."
- Gold prints a fresh record at $4,601.32 before consolidating below the $4,600 psychological area
- Technical indicators remain skewed to the upside, despite clear overbought signals in the short term.
- Key support levels around $4,550 and $4,500 will determine whether the bullish momentum can extend.
Gold (XAU/USD) trades around $4,580 on Monday at the time of writing, up 1.60% on the day. The precious metal reached a new all-time high at $4,601.32 earlier in the day, extending a particularly strong bullish trend seen over recent weeks.
From a macroeconomic perspective, the backdrop remains broadly supportive for Gold, although this aspect has taken a back seat. Persistent geopolitical tensions, concerns surrounding the independence of the Federal Reserve (Fed), and a weaker US Dollar (USD) continue to underpin demand for safe-haven assets. That said, slightly stronger-than-expected US labor data have tempered expectations of aggressive monetary easing in 2026, marginally limiting the metal’s fundamental upside.
Technical Analysis
In the 4-hour chart, XAU/USD trades at $4,584.50. The 50-period Simple Moving Average (SMA) rises above the 100-period one, signaling sustained bullish momentum. Both SMAs trend higher, and price holds above them, with the 50 SMA at $4,431.11 offering nearby dynamic support. The 14-period RSI sits at 73.77 (overbought), indicating stretched momentum that could prompt a pause. Immediate resistance stands at $4,601.32, while support aligns at $4,550.
The rising trend line from $4,274.47 underpins the bullish bias, offering a secondary floor near $4,470.87. Additional support is seen at $4,500, which would be tested on pullbacks if momentum cools. A sustained hold above the cited supports would keep the near-term tone positive, while a rejection near the overhead barrier would tilt price action into consolidation.
(The technical analysis of this story was written with the help of an AI tool.)
The Federal Reserve (Fed) has received grand jury subpoenas from the Justice Department regarding Jerome Powell’s June congressional testimony about renovations at the Fed’s headquarters, ABN AMRO's Senior Economist Rogier Quaedvlieg reports.
Powell defends Fed independence amid political probe
"Last year, it became apparent that the Trump administration viewed these renovations as a potential way to challenge Chair Powell. In a video statement last night, Powell emphasized that 'the threat (…) is a consequence of the Federal Reserve setting interest rates based on our assessment of what will serve the public, rather than following the preferences of the President'. Meanwhile, Trump denied any knowledge of the investigation. A subpoena marks the beginning of an evidence-gathering process. This is an investigation, which may conclude without charges. If an indictment does occur, it will likely follow the precedent set by the Lisa Cook case, likely reaching the Supreme Court and taking considerable time."
"Attorney General Pam Bondi has instructed various offices to investigate possible taxpayer abuse. The Fed’s renovation costs have increased from $1.9 billion in 2023 to $2.5 billion. In his June testimony, Powell attributed the overruns to higher costs for materials, equipment, and labour, as well as unforeseen issues like toxic contamination. They are not due to claimed extravagant features, like say, a golden ballroom. Overall, the charges appear highly political, and it seems unlikely that this investigation will find any damning evidence. Powell has responded forcefully, calling the subpoena what it is. The timing suggests this may relate to his potential continued presence on the Fed’s board of governors after his term as Chair, which is crucial for Trump’s influence over the board. This situation increases pressure on Powell to step down."
"If anything, this challenge to the Fed’s independence could prompt the FOMC to take a slightly more hawkish stance to defend the institution. The latest labour market report can reasonably supports holding rates steady for now. Our base case remains a pause in January, followed by quarterly 25 basis point cuts starting in March. However, if the situation drags on, rate cuts may be delayed."
- Gold surges to fresh record highs as concerns over Fed independence fuel safe-haven demand.
- Fed Chair Jerome Powell's investigation and rising geopolitical risks keep markets on edge.
- Technically, Gold remains in a strong uptrend, posting higher highs and higher lows on the daily chart.
Gold (XAU/USD) kicks off the week with strong upward momentum, surging to fresh record highs near the $4,600 psychological mark as renewed concerns over Federal Reserve (Fed) independence fuel broad risk aversion. At the time of writing, XAU/USD trades around $4,583, up nearly 1.70% on the day.
Market sentiment has been shaken by an unprecedented development in the United States (US), where prosecutors have launched a criminal investigation into Fed Chair Jerome Powell.
The rising political pressure on the Fed undermines confidence in US monetary policy and weighs on the US Dollar (USD), while supporting Gold amid growing economic uncertainty.
At the same time, persistent geopolitical tensions continue to drive safe-haven flows into Bullion. Investors are closely monitoring nationwide protests in Iran, renewed US-Greenland rhetoric, and ongoing developments involving Venezuela.
Looking ahead, the focus this week turns to US economic data, with the Consumer Price Index (CPI) due on Tuesday, followed by Retail Sales and the Producer Price Index (PPI) on Wednesday, alongside a heavy slate of Fed speakers throughout the week.
Market movers: Geopolitical risks and Fed turmoil keep investors cautious
- The US Department of Justice (DoJ) issued grand jury subpoenas on Friday as part of a criminal investigation focused on Fed Chair Jerome Powell, linked to his Senate testimony on the Fed’s $2.5 billion headquarters renovation project.
- Chair Jerome Powell said in a video statement late Sunday that the DOJ action is politically motivated, stressing that it “is not about my testimony last June or about the renovation of the Federal Reserve buildings,” adding that those explanations “are pretexts.” Powell said the issue is whether the Fed can continue to set interest rates “based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation.”
- On Sunday, US President Donald Trump threatened possible military action against Iran amid rising unrest and a mounting death toll. In response, Tehran warned it would target US army bases if Washington follows through on renewed threats to strike the country in support of protesters.
- US Secretary of State Marco Rubio is set to meet with Danish and Greenland officials this week as President Donald Trump doubles down on plans to acquire Greenland.
- Last week’s US labour-market data eased fears of a sharp deterioration in employment conditions and tempered expectations for a near-term Fed rate cut. However, traders continue to price in around two cuts later this year. The US economy added 50,000 jobs in December, below expectations for a 60,000 increase, but the softer headline was partly offset by a drop in the Unemployment Rate to 4.4% from 4.6%.
Technical analysis: Bulls stay in control as Gold trades at record levels
From a technical perspective, XAU/USD remains in a well-defined uptrend, extending gains into uncharted territory after last year’s historic rally.
The daily chart shows a clear sequence of higher highs and higher lows since prices bottomed near the $4,000 area in October, following a brief corrective pullback from the previous record high.
Trend conditions remain constructive, with moving averages continuing to slope higher. The 21-day Simple Moving Average (SMA) provides dynamic support near $4,403.
That said, near-term pullback risks are rising, as the Relative Strength Index (RSI) hovers close to overbought territory and shows early signs of bearish divergence.
On the downside, initial support is seen around the $4,500 psychological level. On the upside, bulls are eyeing a sustained break above $4,600, which could open the door toward the $4,700 region. The Average Directional Index (ADX) near 30 signals that the broader trend remains strong.
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.
- The Pound Sterling bounces back against the US Dollar to around 1.3465 as the US DoJ imposes criminal charges on Fed’s Powell.
- Investors await the UK employment and the US inflation data, to be released on Tuesday.
- Fed’s Bostic stresses the need to bring inflation under control.
The Pound Sterling (GBP) recovers strongly to around 1.3465 against the US Dollar (USD) during the European trading session on Monday after a weak opening around 1.3390. The GBP/USD pair bounces back as the US Dollar corrects sharply, following the opening of a criminal investigation on Federal Reserve (Fed) Chair Jerome Powell over mismanaging funds in the reconstruction of Washington’s headquarters.
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.3% lower near 98.80. The DXY has retraced after revisiting the monthly high near 99.25.
Over the weekend, the United States (US) Department of Justice sent a subpoena to the Fed for Jerome Powell, which directs an inquiry into his statements during his testimony at the Senate in June 2025 and an examination of his spending records.
In response, Fed’s Powell has also stated that the “new threat is not about his testimony or the renovation project but a pretext”. Powell added that the threat of criminal charges is a “consequence of the Fed setting interest rates based on its assessment of the public interest rather than the president's preferences”.
Market experts believe that criminal charges against Fed’s Powell have escalated his feud with US President Donald Trump, who has criticized him several times since his return to the White House for not lowering interest rates. This could lead to a serious dent in the Fed's autonomy, an unfavorable situation for the US Dollar.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.47% | -0.39% | -0.03% | -0.24% | -0.27% | -0.39% | -0.56% | |
| EUR | 0.47% | 0.08% | 0.44% | 0.22% | 0.20% | 0.08% | -0.09% | |
| GBP | 0.39% | -0.08% | 0.34% | 0.14% | 0.12% | -0.00% | -0.17% | |
| JPY | 0.03% | -0.44% | -0.34% | -0.21% | -0.24% | -0.36% | -0.52% | |
| CAD | 0.24% | -0.22% | -0.14% | 0.21% | -0.02% | -0.14% | -0.31% | |
| AUD | 0.27% | -0.20% | -0.12% | 0.24% | 0.02% | -0.12% | -0.30% | |
| NZD | 0.39% | -0.08% | 0.00% | 0.36% | 0.14% | 0.12% | -0.17% | |
| CHF | 0.56% | 0.09% | 0.17% | 0.52% | 0.31% | 0.30% | 0.17% |
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).
Daily Digest Market Movers: Fed's Bostic warns of inflation risks
- Looking at the United Kingdom, the Pound Sterling is expected to be driven by the UK employment data for the three months ending in November this week, which will be released on Tuesday. Investors will pay close attention to the UK labor market data to get fresh cues on the Bank of England’s (BoE) monetary policy outlook.
- In 2025, UK labor market concerns remain elevated as firms avoid aggressive hiring to offset the impact of higher employers’ contributions to social security schemes.
- Meanwhile, the monthly survey by the Recruitment and Employment Confederation (REC) trade body and accountants KPMG showed earlier in the day that labor demand remained soft while wage growth accelerated in December.
- In the US, the Nonfarm Payrolls (NFP) report for December showed on Friday that the Unemployment Rate dropped sharply to 4.4% from 4.6% in November. However, hiring was lower at 50K against estimates of 60K and the prior reading of 56K.
- Going forward, the next major trigger for the US Dollar will be the release of the Consumer Price Index (CPI) data on Tuesday. Investors will closely monitor the US inflation data for fresh cues on the interest rate outlook.
- In 2025, the Fed delivered three interest rate cuts of 25 basis points (bps) in an attempt to contain labor market woes, even as inflation had remained well above the 2% target for a long period.
- On Friday, Atlanta Fed President Raphael Bostic said in an interview with radio station WLRN that inflation is “too high” and that the Fed needs to get it “under control”.
Technical Analysis: GBP/USD attracts bids below 20-day EMA
GBP/USD trades higher, at around 1.3465 at the time of writing. The 20-day Exponential Moving Average (EMA) rises and sits at 1.3438, with price holding just above it, which supports a bullish tone.
The 14-day Relative Strength Index (RSI) at 53 (neutral) has turned higher, confirming steady momentum.
Measured from the 1.3794 high to the 1.3014 low, the 61.8% retracement at 1.3496 acts as immediate resistance . A decisive break above it would signal that the bearish downtrend is losing strength and could open further upside towards the September 17 high at 1.3726.
Conversely, failure to clear 1.3496 would keep the pair contained, with a drift back toward the 50% retracement at 1.3404 dampening momentum and maintaining the rebound within a tight range.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Consumer Price Index (YoY)
Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Tue Jan 13, 2026 13:30
Frequency: Monthly
Consensus: 2.7%
Previous: 2.7%
Source: US Bureau of Labor Statistics
The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
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