GBP/JPY Buoyed by BoJ Deputy Governor Uchida's Remarks
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GBP/JPY traded near 189.76, supported by comments from BoJ Deputy Governor Shinichi Uchida, suggesting continued rate hikes this year. Japan's inflation is edging closer to the 2% target, but a contraction in industrial production and mixed CPI data are putting pressure on the yen. Retail sales rose by 3.9% YoY, slightly exceeding expectations. Investors remain focused on developments in UK-US trade talks and broader market sentiment for further guidance on GBP/JPY movements.
GBP/USD Tumbles Following Starmer-Trump Talks
GBP/USD hovered around 1.2593 as President Trump’s announcement of potential trade tariffs on the UK raised concerns. Talks between Trump and UK Prime Minister Keir Starmer could intensify market volatility. Meanwhile, Bank of England's Swati Dhingra's support for more aggressive monetary easing continues to weigh on the pound. In the US, GDP growth of 2.4% QoQ and a 3.1% rise in durable goods orders strengthened the US dollar. Investors are awaiting US PCE inflation data for further direction on the GBP/USD exchange rate.
EUR/USD Rebounded Amid Renewed US-EU Trade Tensions
EUR/USD edged higher to 1.0399 as the US dollar strengthened amid rising trade uncertainties. Trump's potential tariffs on the EU may add pressure to the shared currency, with the EU pledging a firm response. German retail sales rose by 0.2% MoM, and French CPI remained flat. US GDP growth, durable goods orders, and jobless claims have contributed to dollar strength. Today's US PCE inflation data for January will significantly impact the Fed's monetary policy and market sentiment surrounding the EUR/USD exchange rate.
AUD/USD Sinks Ahead of US PCE Inflation Data
AUD/USD declined to 0.6215 as President Trump's confirmation of 25% tariffs on imports from Mexico and Canada put pressure on the Australian dollar. Disappointing Australian data, including a 0.2% contraction in Q4 2024 Private Capital Expenditure and concerns over the tight labour market, contribute to bearish sentiment. Investors are focused on the upcoming US PCE inflation data and US-China trade developments for further guidance on the AUD/USD exchange rate.
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