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Wednesday, 11th February: What’s Brewing?
Job Numbers and Retail Sales in the US
The US ADP report has shown a slight improvement. The private sector added 6.5K new jobs in the four weeks ending January 24. This is an uptick from the previous week’s 5K. Meanwhile, December’s Retail Sales were static, failing to meet expectations of a 0.4% rise, and falling short of November’s 0.6% increase.
Currency Movements
The US Dollar Index (DXY) is perched near 96.80. It’s attempting a recovery from intraday losses, as anticipation builds for January’s Nonfarm Payrolls (NFP) on Wednesday, followed by the January Consumer Price Index (CPI) on Friday.
US Dollar Price Today
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.20% | 0.37% | -0.87% | -0.06% | 0.30% | 0.21% | 0.26% | |
| EUR | -0.20% | 0.18% | -1.05% | -0.25% | 0.11% | 0.00% | 0.07% | |
| GBP | -0.37% | -0.18% | -1.22% | -0.42% | -0.07% | -0.17% | -0.11% | |
| JPY | 0.87% | 1.05% | 1.22% | 0.81% | 1.17% | 1.06% | 1.13% | |
| CAD | 0.06% | 0.25% | 0.42% | -0.81% | 0.35% | 0.26% | 0.33% | |
| AUD | -0.30% | -0.11% | 0.07% | -1.17% | -0.35% | -0.10% | -0.03% | |
| NZD | -0.21% | 0.00% | 0.17% | -1.06% | -0.26% | 0.10% | 0.06% | |
| CHF | -0.26% | -0.07% | 0.11% | -1.13% | -0.33% | 0.03% | -0.06% |
The US Dollar demonstrated strength against the British Pound but showed weakness against the Japanese Yen.
Market Reactions
The GBP/USD is near 1.3650, sliding as the market digests the Bank of England’s dovish stance, with an anticipated 50bps rate cut by year-end. Meanwhile, the EUR/USD stands around 1.1890, trimming gains, with attention turning to Friday’s Eurozone flash GDP. The AUD/USD shows little movement near 0.7070.
Gold Steadiness
GOLD, a classic safe-haven asset, holds steady around $5,010. Reduced geopolitical tensions have kept movements minimal. For many, gold remains a hedge against inflation and unstable currencies.
FAQs on Gold
- Storage of Value: Gold is a staple in currency reserves, safeguarding against economic instability.
- Central Bank Reserves: Central banks are the largest holders, with a significant stock acquisition last year, as per the World Gold Council.
- Market Correlations: Inverse to the USD, appreciating as the Dollar weakens.
What’s Ahead?
Wednesday, 11th:
- China January Consumer Price Index (CPI)
- US January Nonfarm Payrolls
Thursday, 12th:
- UK flash Gross Domestic Product (GDP) for Q4
Friday, 13th:
- RBNZ Inflation Expectations Q1
- Swiss January CPI
- Eurozone flash GDP Q4
- US January CPI
Other Market Developments
The USD/JPY has declined to a weekly low of 154.50, influenced by Japan’s elections favouring Prime Minister Sanae Takaichi.
In summary, markets are poised, with eyes on forthcoming economic data. As ever, contingencies from geopolitical developments and economic releases will steer the course.
