Here is what you need to know on Monday, January 17:
Markets have started the new week in a calm manner and the US Dollar Index, which snapped a three-day losing streak on Friday, has gone into a consolidation phase above 95.00 early Monday. Bond and stock markets in the US will remain closed on Monday in observance of the Martin Luther King Jr. Day holiday. During the European trading hours, Germany's Bundesbank will release its Monthly Report. Later in the day, Manufacturing Sales data from Canada and Bank of Canada's (BOC) Business Outlook Survey will be featured in the North American economic docket.
In the early Asian session, the data from China revealed that the Gross Domestic Product (GDP) expanded by 4% on a yearly basis in the fourth quarter. Although this reading came in weaker than the 4.9% growth recorded in the third quarter, it surpassed the market expectation of 3.6%. Additionally, annual Industrial Production in December increased by 4.3%, compared to analysts' estimate of 3.6%. On a negative note, Retail Sales rose by 1.7% in December (YoY), missing experts' forecast of 3.7%. Despite these mixed data releases, the market mood remains upbeat with the Nikkei 225 and the Shanghai Composite indexes rising 0.75% and 0.7%, respectively.
Meanwhile, the People's Bank of China (PBOC) announced on Monday that it has lowered the interest rate on 700 billion yuan ($110.19 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.85%. Additionally, the PBOC cut the 7-day reverse repo rate by 10 basis points to 2.1% from 2.2%.
EUR/USD lost its traction before reaching 1.1500 on Friday and closed in the negative territory. Early Monday, the pair is moving sideways in a narrow band above 1.1400.
GBP/USD closed higher for the fifth straight week despite Friday's sharp retreat. The pair is staying relatively quiet below 1.3700 to start the new week.
After falling to its weakest level in three weeks at 113.50, USD/JPY staged a decisive rebound on the back of surging US Treasury bond yields on Friday. The pair continues to edge higher and was last seen rising 0.2% on the day at 114.44.
Gold turned south and erased a portion of its weekly gains on Friday as the benchmark 10-year US T-bond yield rose nearly 5% on the day. Nevertheless, XAU/USD managed to hold above key technical support levels that align near $1,800 and seems to have gone into a consolidation phase around $1,820.
USD/CAD registered weekly losses as the commodity-related CAD capitalized on rising oil prices. The barrel of West Texas Intermediate gained more than 7% last week. The pair has dipped below 1.2500 on Thursday but the renewed dollar strength allowed it to return to the mid-1.2500 area.
Bitcoin spent the weekend in a very tight range and started to edge lower toward $42,000 early Monday. Ethereum rose for three straight days but lost its recovery momentum after meeting resistance at $3,400. ETH is down more than 2% so far on the day and is trading below $3,300.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
GBP/USD consolidates above 1.2500, eyes on US PCE data
GBP/USD fluctuates at around 1.2500 in the European session on Friday following the three-day rebound. The PCE inflation data for March will be watched closely by market participants later in the day.
Gold clings to modest daily gains at around $2,350
Gold stays in positive territory at around $2,350 after closing in positive territory on Thursday. The benchmark 10-year US Treasury bond yield edges lower ahead of US PCE Price Index data, allowing XAU/USD to stretch higher.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.