The US Dollar started the week on a defensive note, with the Dollar Index falling to new two-week lows. Investors remain focused on announcements from the new Trump administration. EUR/USD climbed, GBP/USD bounced back, and AUD/USD traded defensively despite a solid Australian jobs report. The BoJ's rate hike expectations supported the Japanese Yen, pushing USD/JPY lower. WTI prices fell, while Gold and Silver both saw a positive start to the week.
The US Dollar started the new trading week on the defensive as market participants closely watched President Trump's Inauguration Day. This coincided with inactivity in the US markets due to the MLK Jr. Day holiday. Here's what you need to know on Tuesday, January 21st:\The US Dollar Index (DXY) accelerated its decline and fell to new two-week lows below 108.00 on Monday.
With no significant data releases scheduled for Tuesday, investors are expected to remain focused on announcements from the Trump administration. EUR/USD surged, reaching two-week highs just above 1.0400, reflecting a general increase in risk appetite across the market. The ZEW Institute's Economic Sentiment survey for Germany and the broader Euroland, along with an ECOFIN meeting, will be closely watched.\GBP/USD moved back above the key 1.2300 level, following the sharp sell-off in the US Dollar on Monday. The main event for the FX market will be the publication of the UK labor market report. Further re-pricing of rate hikes by the Bank of Japan (BoJ) provided support to the Japanese yen and triggered a deeper retracement in USD/JPY, pushing it closer to the 155.00 mark. The Balance of Trade results will be the next key event in Japan on January 23rd, followed by weekly Foreign Bond Investment figures.\Interestingly, AUD/USD traded defensively on Thursday, briefly falling below the 0.6200 support level despite an inconclusive performance of the Dollar and a solid jobs report in Australia. The release of the Westpac Leading Index for December will be the next significant event in Australia. Meanwhile, WTI prices fell to multi-day lows, breaking below the $76.00 per barrel mark, as traders continued to assess potential developments from the Trump administration. Gold prices resumed their upward movement on Monday, holding above the key $2,700 per ounce troy mark. Silver prices found support around the key 200-day Simple Moving Average (SMA) amidst a positive start to the week
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