USD Drops, JPY Surges & EUR Hits Multi-Week Highs
Global markets witnessed notable currency fluctuations and economic developments last week, driven by policy shifts, central bank decisions, and key data releases. From a weaker USD to a surging JPY, here's a quick dive into how major currencies, gold, and oil moved amid these dynamics.
USD - Hits a One-Month Low
The US Dollar Index (DXY) dropped below 107.5, hitting a one-month low as markets reassessed pro-inflationary policies from President Trump. While he emphasized boosting energy output and deregulation, reduced focus on tariffs lowered inflation risks. Meanwhile, US unemployment claims reached a three-year high, reflecting the impact of restrictive monetary policies.
JPY - Japanese Yen Strengthens
The Japanese yen strengthened toward 155 per dollar after the BoJ raised interest rates by 25 basis points to 0.5%, the highest in 16 years. The BoJ expects inflation to reach 2% and projects strong wage growth. December core inflation rose to 3%, but manufacturing continued to contract while services saw growth.
EUR - EUR/USD Surges
The Euro climbed to multi-week highs near 1.0500, supported by strong German and Eurozone PMI data showing growth in private sector activity. Key resistance levels lie at 1.0574 and 1.06. Manufacturing PMI rose to 46.1, while services PMI slightly dipped to 51.4.
GBP - British Pound Tops
The British Pound rose above $1.24 after better-than-expected PMI data for January, despite declining new orders and falling employment. Rising input costs and upcoming tax hikes could fuel inflation, but the BoE is still expected to cut rates by 25bps in February.
INR - Indian Rupee Near Record Low
The Indian rupee hovered near its record low of 86.6 per USD amid slower growth, rising capital outflows, and declining foreign exchange reserves. December inflation eased to 5.2%, while FY2025 GDP growth slowed to 6.4%, prompting speculation about an RBI rate-cut cycle.
PHP - Philippine Peso Gains
The Philippine Peso (PHP) strengthened, with USDPHP falling to 58.3890 on January 24. Analysts project it to trade at 58.42 by the end of Q1 and around 59.98 in the next 12 months. The peso remains volatile after its all-time high of 60.66 in November 2024.
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Gold - holds
Gold prices remained above $2,770, nearing the record high of $2,790. Reduced concerns over aggressive US tariffs on China supported demand for the safe-haven asset, as investors awaited US PMI data.
Oil - WTI Crude Rebounds
WTI crude rebounded to $75 per barrel after six days of losses, driven by Trump's comments about lowering prices and boosting US production. EIA data showed a 1-million-barrel drop in crude inventories, marking the ninth consecutive decline, while gasoline inventories increased.
As global economies adjust to shifting policies and market conditions, these currency and commodity movements highlight evolving challenges and opportunities. To know more and speak to an expert, call 600522265 today!
The Week Ahead - Economic Calendar
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1 个月Very insightful ??