Forex Today – Asian Session: The countdown to tomorrow’s and next week’s events is already underway

Here’s what you need to know on Thursday, January 26:

The clock keeps ticking as we approach the end of the month and the Federal Reserve and European Central Bank meetings. A storm is brewing in the forex market and Thursday’s data will be crucial in this regard.

Activity was subdued in some pairs, but more lively in others as investors and traders prepare for a series of key economic figures to be released today that will inform the Federal Reserve’s rate decision. interest on February 1.

The US Department of Commerce will publish its preliminary estimates of fourth-quarter Gross Domestic Product at the same time as the country’s core CPI prices, which are likely to accelerate to a pace of 0.3%m/m in December, although the 0.4% rise cannot be ruled out. The year-on-year growth rate probably slowed to 4.5%, suggesting that prices continue to moderate but remain elevated,” the analysts noted. Regarding growth data, The analyst said: “We also expect Gross Domestic Product growth to have remained strong in the fourth quarter, posting another above-trend increase.”Growth was likely supported by firm consumption and inventories. ”.

Pending this data, WIRP suggests a 25 basis point rise on February 1, with less than a 5% chance of a higher than 50 rise. Another 25 basis point rise on March 22 is priced at around 80%, while a final 25 basis point rise in the second quarter is priced at just 35%.

The subdued outlook sent the US dollar lower against the euro on Wednesday, although this is not clear to traders and the EUR/USD pair held in a 1.0875/1.0923 range during the day.

On the other hand, the USD/JPY pair moved better. The pair closed lower the day before, giving bulls the fuel to continue selling against pullbacks, denying bulls room in the high formation set earlier in the week USD/JPY fell from a high of 130.58 to a new low of 129.26 when New York traders came online, extending London bidding. This provided great opportunities for trades targeting previous support structures on the way down to 129.50 and then 129.20.

USD/CAD was another pair that offered opportunities to traders with a two-way action on the day during the course of the Bank of Canada interest rate decision. The Bank of Canada, as expected, raised the key interest rate by 25 basis points to 4.5%. In the statement, central banks mentioned that they are likely to keep rates at this level while they assess the impact of recent policy measures. As a result, the Loonie weakened across the board, but soon found buyers as BOC Governor Tiff Macklem delivered his speech on the outlook for monetary policy and responded to questions, warning that they do not rule out further hikes and are dependent on data. USD/CAD rose from 1.3365 to 1.3426. It then fell back to a previous support structure at 1.3375, in a 50% median reversal of the BoC rally.

The Australian dollar and kiwi rose on Wednesday after Australia reported surprisingly high inflation and, as for New Zealand’s Q4 CPI inflation (although still too high at 7.5% yoy in Q4 ), analysts believe that the CPI stood at 2.5% year-on-year in the fourth quarter. The Kiwi traded between 0.6450 and 0.6504, while the Australian traded between 0.7032 and 0.7122 (a key level for the day to come). looming, with 0.7150).

Elsewhere, the US 10-year yield was down 1bp to 3.45% and WTI was down 0.1% to $80/bbl. Gold rose 0.8% to $1940.4/oz.