EUR/USD: EUR amounts
USD/JPY: USD amounts
USD/CHF: USD amounts
AUD/USD: AUD amounts
USD/CAD: USD amounts
The price for Gold stood at 7,997.48 Indian Rupees (INR) per gram, up compared with the INR 7,965.92 it cost on Tuesday.
The price for Gold increased to INR 93,281.70 per tola from INR 92,912.91 per tola a day earlier.
| Unit measure | Gold Price in INR |
|---|---|
| 1 Gram | 7,997.48 |
| 10 Grams | 79,975.37 |
| Tola | 93,281.70 |
| Troy Ounce | 248,749.70 |
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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The GBP/USD pair struggles to capitalize on its strong gains registered over the past two days and consolidates near a one-week top, below the 1.2500 psychological mark during the Asian session on Wednesday. The downside, however, remains cushioned amid some follow-through US Dollar (USD) selling.
In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, hangs near the weekly low amid the prospects for further policy easing by the Federal Reserve (Fed). The bets were reaffirmed by the Job Openings and Labor Turnover Survey (JOLTS) released on Tuesday, which pointed to a slowdown in the US labor market and should allow the Fed to lower borrowing costs further despite stick inflation.
Meanwhile, the global risk sentiment remains supported by the optimism led by US President Donald Trump’s decision to delay tariffs on Canadian and Mexican imports, which helped ease concerns about a trade war and its impact on the global economy. This is evident from a generally positive tone around the equity markets, which is seen as another factor undermining the safe-haven buck and acting as a tailwind for the GBP/USD pair.
Investors, however, remain concerned about the potential fallout from trade tensions between the US and China – the world’s top two economies. This, along with the Fed’s hawkish outlook, helps limit the downside for the USD and caps the upside for the GBP/USD pair. Traders also seem reluctant and might opt to move to the sidelines ahead of the key central bank event risk – the Bank of England (BoE) policy meeting on Thursday.
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
EUR/JPY retreats after gains in the previous session, trading near 159.00 during Asian hours on Wednesday. The decline of the EUR/JPY cross is driven by a stronger Japanese Yen (JPY), supported by rising wages in Japan and growing expectations that the Bank of Japan (BoJ) will further hike interest rates.
Japan’s Labor Cash Earnings surged 4.8% year-on-year in December, up from 3.9% in November, exceeding the market forecast of 3.8%. This marks the highest wage growth in nearly three decades. Additionally, inflation-adjusted real wages, which indicate consumer purchasing power, increased by 0.6% in December, recording a second consecutive month of positive growth.
More on data, the Jibun Bank Composite Purchasing Managers’ Index (PMI) rose to 51.1 in January 2025 from 50.5 in December, signaling the third straight month of expansion in private sector activity. Meanwhile, the Services PMI was revised upward to 53.0 from a preliminary estimate of 52.7, following a final reading of 50.9 in the prior month.
EUR/JPY may face further downside as the Japanese Yen finds additional support from safe-haven flows amid escalating US-China trade tensions. On Wednesday, the US Customs and Border Protection announced that new tariffs of 10% would be applied to both Hong Kong and mainland China.
The Euro (EUR) remains under pressure as investors anticipate potential tariff threats from US President Donald Trump against the Eurozone. Over the weekend, Trump stated that he would “definitely” impose tariffs, accusing the bloc of unfair trade practices by not purchasing enough US cars and farm products. He claimed that the EU “takes almost nothing, and we take everything from them.”
In response, French President Emmanuel Macron warned that the European Union (EU) would retaliate if its interests were threatened. “If our commercial interests are attacked, Europe, as a true power, will have to make itself respected and therefore react,” Macron stated, as reported by The Guardian.
This indicator, released by the Ministry of Health, Labor and Welfare, shows the average income, before taxes, per regular employee. It includes overtime pay and bonuses but it doesn’t take into account earnings from holding financial assets nor capital gains. Higher income puts upward pressures on consumption, and is inflationary for the Japanese economy. Generally, a higher-than-expected reading is bullish for the Japanese Yen (JPY), while a below-the-market consensus result is bearish.
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Last release: Tue Feb 04, 2025 23:30
Frequency: Monthly
Actual: 4.8%
Consensus: 3.8%
Previous: 3%
Source: Ministry of Economy, Trade and Industry of Japan
The EUR/USD pair struggles to capitalize on this week’s solid recovery from the 1.0200 neighborhood, or the lowest level since January 13, and oscillates in a range near the weekly top touched earlier this Wednesday. Spot prices currently trade around the 1.0375-1.0380 region, nearly unchanged for the day amid mixed fundamental cues.
The Job Openings and Labor Turnover Survey (JOLTS) published on Tuesday pointed to a slowdown in the US labor market and supports prospects for further policy easing by the Federal Reserve (Fed). In fact, the markets are pricing in the possibility that the US central bank will lower borrowing costs twice this year. Apart from this, the risk-on mood keeps the safe-haven US Dollar (USD) depressed near the weekly low, which, in turn, is seen acting as a tailwind for the EUR/USD pair.
Traders, however, seem reluctant to place aggressive bullish bets in the wake of concerns that US President Donald Trump would slap tariffs on goods from the European Union. Adding to this, the European Central Bank’s (ECB) dovish stance, which overshadowed a rise in the Eurozone Harmonized Index of Consumer Prices (HICP) at an annual rate of 2.5% in January, is seen undermining the Euro and contributing to keeping a lid on any meaningful upside for the EUR/USD pair.
Traders now look forward to the release of the final Eurozone Services PMI. Meanwhile, the US economic docket features the release of the ADP report on private-sector employment and ISM Services PMI. Apart from this, speeches by influential FOMC members will drive the USD demand and provide a fresh impetus to the EUR/USD pair. The focus, however, remains glued to the US monthly employment details – popularly known as the Nonfarm Payrolls (NFP) report on Friday.
The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
USD/INR continues its upward momentum for the fourth consecutive day, trading around 87.10 during Wednesday’s Asian session. The risk-sensitive Indian Rupee (INR) remains under pressure due to increased risk aversion following rising trade tensions between the US and China.
On the economic front, the seasonally adjusted India HSBC Composite Purchasing Managers’ Index (PMI) dropped from 59.2 in December to a 14-month low of 57.7. Despite the decline, the reading remains above the long-term average, signaling continued economic expansion. Meanwhile, the Services PMI registered at 56.5 in January, reflecting strong growth, though it slipped from 59.3 in December to its lowest level since November 2022.
In response to the new 10% US tariff that took effect on Tuesday, China imposed a 15% tariff on US coal and liquefied natural gas (LNG) imports, along with an additional 10% tariff on crude oil, farm equipment, and certain automobiles.
Despite the escalating trade dispute between the United States and China, traders remain hopeful for a potential resolution, similar to the agreements reached with Mexico and Canada. US President Donald Trump stated on Monday that he expects to speak with China soon but warned, “If we can’t reach a deal with China, the tariffs will be very, very substantial.” However, no further developments have been reported.
Meanwhile, investors anticipate a 25-basis-point rate cut in the Reserve Bank of India’s (RBI) upcoming monetary policy meeting on Friday, amid slowing economic growth. Market optimism has been further buoyed by expectations following the FY2026 Budget.
Looking ahead, traders await Friday’s US Nonfarm Payrolls (NFP) report, which is expected to influence the Federal Reserve’s (Fed) monetary policy direction. Consensus estimates suggest a slight slowdown in job creation for January 2025.
The Composite Purchasing Managers Index (PMI), released on a monthly basis by S&P Global and HSBC Bank, is a leading indicator gauging business activity in India This d by weighting together comparable manufacturing and services indices using official manufacturing and services annual value added. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the Indian private economy is generally expanding, a bullish sign for the Indian Rupee (INR). Meanwhile, a reading below 50 signals that the activity is generally declining, which is seen as bearish for INR.
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Last release: Wed Feb 05, 2025 05:00
Frequency: Monthly
Actual: 57.7
Consensus: 57.9
Previous: 57.9
Source: S&P Global
After weakening against its major rivals on improving risk mood and disappointing US data on Tuesday, the US Dollar (USD) struggles to hold its ground early Wednesday. Later in the session, the US economic calendar will feature ADP Employment Change and ISM Services Purchasing Managers Index (PMI) data for January. Investors will continue to scrutinize comments from central bank officials throughout the day as well.
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.34% | -0.79% | -1.07% | -2.66% | -0.91% | -1.35% | -1.27% | |
| EUR | 0.34% | -0.05% | 0.59% | -1.05% | -0.12% | 0.29% | 0.36% | |
| GBP | 0.79% | 0.05% | -0.46% | -1.00% | -0.06% | 0.34% | 0.41% | |
| JPY | 1.07% | -0.59% | 0.46% | -1.61% | 0.30% | 0.65% | 0.43% | |
| CAD | 2.66% | 1.05% | 1.00% | 1.61% | 0.69% | 1.35% | 1.43% | |
| AUD | 0.91% | 0.12% | 0.06% | -0.30% | -0.69% | 0.40% | 0.47% | |
| NZD | 1.35% | -0.29% | -0.34% | -0.65% | -1.35% | -0.40% | 0.08% | |
| CHF | 1.27% | -0.36% | -0.41% | -0.43% | -1.43% | -0.47% | -0.08% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The USD Index lost about 0.4% on Tuesday after the US Bureau of Labor Statistics reported that JOLTS Job Openings declined to 7.6 million in December, falling short of the market expectation of 8 million. Additionally, Wall Street’s main indexes gained traction after the opening bell, pointing to a positive shift in market mood that didn’t allow the USD to stage a rebound. Early Wednesday, however, US stock index futures trade in negative territory.
During the Asian trading hours on Wednesday, the US Customs and Border Protection issued a notice on, noting that additional US tariffs of 10% will apply to Hong Kong as well as mainland China. Meanwhile, the data from China showed that the Caixin Services PMI declined to 51 in January from 52.2 in December.
EUR/USD benefited from the broad USD weakness and registered daily gains on Tuesday. The pair clings to small daily gains but stays below 1.0400 in the European morning on Wednesday. Eurostat will publish Producer Price Index data for December later in the session.
Japan’s Economy Minister Ryosei Akazawa noted on Wednesday that the government’s focus is to eradicate Japan’s deflationary mindset. “With an ambitious goal to boost minimum wages, the government is trying to eradicate deflationary mindset,” he added. USD/JPY stays under heavy bearish pressure to begin the European session and trades at its lowest level since mid-December near 153.00.
GBP/USD closed in positive territory for the second consecutive day on Tuesday. The pair stays relatively quiet and fluctuates in a tight channel below 1.2500 in the European morning on Wednesday.
The Unemployment Rate in New Zealand rose to 5.1% in the fourth-quarter from 4.8% in the third quarter, Statistics New Zealand reported on Wednesday. This reading came in line with the market expectation and failed to trigger a noticeable market reaction. At the time of press, NZD/USD was trading marginally higher on the day, above 0.5650.
Gold preserves its bullish momentum and trades at a new all-time high above $2,860. Escalating geopolitical tensions after US President Donald Trump proposed resettling Palestinians in neighboring countries seem to be fuelling XAU/USD’s rally.
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Silver price (XAG/USD) rises for the third successive session, trading around $32.30 per troy ounce, during the European hours on Wednesday. The safe-haven metals like Silver gain ground due to increased risk aversion following global trade and economic uncertainties.
In response to the new 10% US tariff that took effect on Tuesday, China imposed a 15% tariff on US coal and liquefied natural gas (LNG) imports, along with an additional 10% tariff on crude oil, farm equipment, and certain automobiles.
However, traders remain hopeful for a potential resolution between the United States (US) and China, similar to the agreements reached with Mexico and Canada. US President Donald Trump stated on Monday that he expects to speak with China soon but warned, “If we can’t reach a deal with China, the tariffs will be very, very substantial.” However, no further developments have been reported.
Trump, earlier this week, announced a temporary suspension of tariffs on Mexico and Canada after their leaders agreed to deploy 10,000 troops to the US border to combat drug trafficking. The tariffs initially imposed two days earlier—25% on Mexican and Canadian goods have been postponed for at least 30 days.
The dollar-denominated Silver attracts buyers as the US Dollar (USD) goes through a technical downward correction. The US Dollar Index (DXY), which measures the US Dollar’s value against six major currencies, remains under downward pressure for the third successive day, trading around 107.70 at the time of writing. Meanwhile, traders brace for Friday’s US Nonfarm Payrolls (NFP) data, which is expected to shape the Federal Reserve’s (Fed) monetary policy direction.
Silver, which does not yield interest, is benefiting from the dovish stance of major central banks. The Bank of Canada (BoC) has halted its quantitative tightening and joined Sweden’s Riksbank in cutting interest rates. Last week, the European Central Bank (ECB) lowered its Deposit Facility Rate by 25 basis points (bps) to 2.75%, while both the Reserve Bank of India (RBI) and the People’s Bank of China (PBoC) have signaled potential rate cuts ahead. Additionally, markets expect the US Federal Reserve (Fed) to implement two rate cuts this year.
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold’s. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold’s moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Euro (EUR) could continue to rise, but any advance is unlikely to break clearly above 1.0425. In the longer run, outlook is unclear; EUR could trade in a broad range of 1.0250/1.0490 for the time being, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
EUR can trade in a broad range
24-HOUR VIEW: “EUR traded in a volatile manner two days ago, as it whipsawed and traded in a broad range. Yesterday, we pointed out that ‘the volatile price action has resulted in a mixed outlook.’ We also pointed out that EUR ‘could continue to trade in a choppy manner, probably between 1.0255 and 1.0370.’ EUR dipped to 1.0271 before rising to a high of 1.0387. Despite the advance, upward momentum has not increased significantly. However, EUR could continue to rise, but any advance is unlikely to break clearly above 1.0425. The major resistance at 1.0490 is unlikely to come into view. Support is at 1.0335; a breach of 1.0290 would indicate that the current upward pressure has eased.”
1-3 WEEKS VIEW: “Two days ago (03 Feb, spot at 1.0245), we indicated that ‘the risk is for further EUR weakness.’ However, we highlighted that ‘it remains to be seen if it can break and remain below 1.0100.’ Yesterday, EUR rose sharply and broke above our ‘strong resistance’ of 1.0380, invalidating our view. The outlook is unclear for now, and EUR could trade in a broad range of 1.0250/1.0490 for the time being.”
The Pound Sterling (GBP) underperforms its major peers, except the US Dollar (USD), on Wednesday as investors turn cautious ahead of the Bank of England’s (BoE) monetary policy decision, which will be announced on Thursday.
The BoE is almost certain to reduce its key borrowing rates by 25 basis points (bps) to 4.50%, with an 8-1 vote split. This would be the third interest rate cut by the BoE in its current policy-easing cycle. Monetary Policy Committee (MPC) member Catherine Mann, who has been an outspoken hawk, is expected to support keeping interest rates steady at 4.75%.
Traders are confident about the BoE cutting interest rates on Thursday as inflationary pressures in the United Kingdom (UK) decelerated at a faster-than-expected pace in December. Inflation in the services sector – which is closely tracked by BoE officials – grew at a moderate pace of 4.4%, compared to 5% growth in November. Also, a sharp decline in the Retail Sales data for December boosted BoE dovish bets.
Market participants are also anticipating that the BoE will cut interest rates by 56 bps this year beyond the policy meeting on Thursday.
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | -0.08% | -0.74% | -0.16% | -0.20% | -0.39% | -0.12% | |
| EUR | 0.12% | 0.04% | -0.61% | -0.05% | -0.08% | -0.28% | -0.00% | |
| GBP | 0.08% | -0.04% | -0.63% | -0.08% | -0.11% | -0.31% | -0.04% | |
| JPY | 0.74% | 0.61% | 0.63% | 0.57% | 0.53% | 0.32% | 0.61% | |
| CAD | 0.16% | 0.05% | 0.08% | -0.57% | -0.04% | -0.24% | 0.04% | |
| AUD | 0.20% | 0.08% | 0.11% | -0.53% | 0.04% | -0.20% | 0.08% | |
| NZD | 0.39% | 0.28% | 0.31% | -0.32% | 0.24% | 0.20% | 0.28% | |
| CHF | 0.12% | 0.00% | 0.04% | -0.61% | -0.04% | -0.08% | -0.28% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
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