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A second strong session for the US dollar placed more pressure on the riskier assets, pushing the EUR/USD to the sub-1.0800 level and the USD Index to flirt with the upper end of the current range amid the development of usual pre-FOMC caution.
Ahead of the FOMC meeting and the release of the Nonfarm Payrolls, the US Dollar Index began the new trading week well, breaking over the 103.80 mark. The Conference Board’s Consumer Confidence Index and the FHFA’s House Price Index, however, are both due on Tuesday, January 30, before those significant events take place.
At the start of the week, the EUR/USD pair highlighted its bearish sentiment and fell below the 1.0800 support level, setting new multi-week lows. On January 30, the advanced Q4 GDP Growth Rate in Germany and the rest of Euroland will be the main item on the Eurozone’s economic calendar.
Tuesday is the deadline for Mortgage Lending and Approvals statistics across the Channel. In reaction to the strong market activity surrounding the US dollar on Monday, GBP/USD recorded its third straight daily retreat.
After two straight days of gains, the USD/JPY pair saw fresh downward pressure and broke below the 148.00 mark. The main event in Japan on Tuesday, January 30, will be the announcement of the December unemployment rate.
The Australian dollar’s positive outlook was sustained by rumours of further stimulus in China, which drove the AUD/USD pair to begin the week with respectable gains while being restrained by the 0.6600 barrier. Retail Sales prints should be the centre of interest in Australia on Tuesday.
Although persistent geopolitical concerns drove up the price of crude oil last week, worries about demand, primarily from China, and the possibility of stricter monetary policy from the Fed and the ECB ultimately caused the commodity to fall on Monday.
As US interest rates declined, the price of gold continued to rise, and silver reached multi-day highs supported by China’s stimulus.
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