Forex Today: German inflation readings and US employment data to drive the action
Here is what you need to know on Thursday, January 4:
The US Dollar (USD) managed to build on Tuesday's gains despite mixed macroeconomic data releases on Wednesday and the USD Index closed in positive territory. Ahead of December ADP Employment Change and weekly Initial Jobless Claims readings, the USD stays relatively calm early Thursday. Germany's Destatis will publish Consumer Price Index (CPI) data for December later in the European session as well.
The ISM Manufacturing PMI in the US improved to 47.4 in December from 46.7 in November, showing that the business activity continued to contract at a slowing pace. Other data from the US revealed that the number of job openings on the last business day of November stood at 8.79 million, down modestly from 8.85 million in October. Finally, the Federal Reserve (Fed) said in the minutes of the December policy meeting that several participants noted situations could justify maintaining the policy rate at its current level for a longer duration than their current expectations.
US Dollar price this week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 1.20% | 0.46% | 0.61% | 0.94% | 1.83% | 0.84% | 0.98% | |
| EUR | -1.06% | -0.57% | -0.44% | -0.10% | 0.64% | -0.21% | -0.13% | |
| GBP | -0.48% | 0.57% | 0.16% | 0.47% | 1.43% | 0.37% | 0.45% | |
| CAD | -0.62% | 0.41% | 0.03% | 0.31% | 1.21% | 0.21% | 0.31% | |
| AUD | -0.95% | 0.10% | -0.47% | -0.34% | 0.71% | -0.11% | 0.01% | |
| JPY | -1.86% | -0.61% | -1.31% | -1.02% | -0.70% | -0.84% | -0.93% | |
| NZD | -0.85% | 0.21% | -0.37% | -0.22% | 0.11% | 0.82% | 0.08% | |
| CHF | -0.92% | 0.13% | -0.45% | -0.29% | 0.02% | 0.89% | -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 Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
After rising slightly above 4%, the benchmark 10-year US Treasury bond yield erased its daily gains to close flat on Wednesday. Early Thursday, the 10-year yield fluctuates in a tight channel at around 3.9%. Meanwhile, US stock index futures trade modestly higher on the day in the European morning after Wall Street's main indexes suffered large losses on Wednesday.
Earlier in the day, the data from China revealed that the Caixin Services PMI rose to 52.9 in December from 51.5 in November. This reading came in better than analysts' estimate of 51.6.
EUR/USD declined below 1.0900 for the first time in over two weeks on Wednesday but staged a modest rebound later in the American session. The pair stays quiet below 1.0950 early Thursday.
Following Tuesday's sharp decline, GBP/USD registered small gains on Wednesday. In the European morning, the pair holds steady above 1.2650.
USD/JPY closed in positive territory for the third consecutive trading day on Wednesday and continued to push higher in the Asian session on Thursday. As of writing, the pair was up 0.3% on the day near 143.70.
Gold came under bearish pressure and dropped to $2,030 in the American session on Wednesday. With the 10-year yield retreating below 4%, however, XAU/USD found a foothold. In the European morning, the pair clings to modest gaily gains and trades slightly below $2,050.