EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Gains Some Ground Ahead Of The Weekend

Key Insights

• EUR/USD remains stuck in the 1.0770 – 1.0880 range.
• GBP/USD is trying to settle above the 1.2400 level. 
• USD/JPY rebounded above the psychologically important 130 level. 

U.S. Dollar (DXY)

U.S. dollar pulled back from session highs after the release of the Existing Home Sales report.

The report indicated that Existing Home Sales dclined by 1.5% month-over-month in December, compared to analyst consensus of -2%. High interest rates continue to put pressure on the housing market.

It remains to be seen whether Existing Home Sales data will have a significant impact on currency dynamics as the weakness of the housing market is not news for anyone who follows financial markets.

EUR/USD

EUR/USD is mostly flat in today’s trading as consolidation continues. The ECB is expected to stay hawkish, which is bullish for the euro.

However, it is not clear whether ECB’s future moves have been fully priced in by the market. In this situation, traders are waiting for additional catalysts. EUR/USD will likely develop strong momentum when it gets out of the current 1.0770 – 1.0880 range.

GBP/USD

GBP/USD continues its attempts to settle above the 1.2400 level. Today, traders focused on the UK Retail Sales report, which indicated that Retail Sales declined by 1% month-over-month in December, compared to analyst consensus which called for growth of 0.5%.

The report fueled recession fears but did not put any material pressure on the British pound, which is trying to gain more ground against the U.S. dollar.

USD/CAD

USD/CAD moved lower after the release of the Retail Sales report from Canada. The report indicated that Retail Sales declined by 0.1% month-over-month in November, compared to analyst consensus of -0.5%.

Other commodity-related currencies gained upside momentum today. AUD/USD settled near 0.6950, while NZD/USD rebounded towards the 0.6450 level.

USD/JPY

USD/JPY rebounded above the 130 level as traders reacted to Japan’s inflation reports. Inflation Rate increased from 3.8% in November to 4% in December, while Core Inflation Rate grew from 3.7% to 4%. Both reports were in line with the analyst consensus, and traders bet that BoJ will maintain its ultra-dovish policy as inflation remains under control.

For a look at all of today’s economic events, check out our economic calendar.