What you should know on Wednesday, January 19:
The US dollar is the overall winner, against all of its major rivals. US Treasury yields soared to levels last seen in February 2022, with the 10-year yield hitting 1,856% and the 2-year yield topping 1%. Stocks fell, with global indices ending the day in the red.
EUR/USD is currently trading around 1.1420, despite an encouraging German ZEW survey, which shows a strong rebound in economic sentiment.
The GBP/USD pair broke below 1.3600, ignoring UK employment figures. The jobless rate fell to 4.1% in the three months to November, while the jobless claimant fell 43,300 in December. Meanwhile, the Downing Street party scandal at the height of the UK lockdown puts Prime Minister Boris Johnson’s leadership at risk.
Earlier in the day, the Bank of Japan announced its decision on monetary policy. As widely anticipated, the central bank remained on the sidelines, although policymakers revised down their growth forecasts for this fiscal year. The USD/JPY pair hit a high of 115.05 but trimmed gains before the close and ended the day flat around 114.50.
AUD/USD fell to 0.7170, bouncing modestly before the close. Weaker gold prices put additional pressure on the pair as the shiny metal settled around $1,814 a troy ounce.
The USD/CAD pair posted a modest intraday gain as higher oil prices capped CAD weakness. WTI is trading at $84.50 a barrel after reaching its highest level since October 2014.
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