Forex Today: The dollar consolidates its losses, focus on the speeches of central banks

This is what you need to know to trade today Tuesday January 10:

Pressured by improving market sentiment and dovish expectations from the Fed, the US dollar continued to weaken against its main rivals earlier in the week. The DXY Dollar Index hit its lowest level in seven months at 102.94, but has managed to post a modest bounce early on Tuesday. The Governor of the Bank of Japan, Haruhiko KurodaGovernor of the Bank of Canada, Tiff Macklenand the Chairman of the FOMC, Jerome Powell, will speak at the International Symposium on the Independence of Central Banks organized by the Riksbank. The US economic calendar will also include the NFIB Business Optimism Index for December and the IBD/TIPP Economic Optimism Index for January.

According to the CME Group’s FedWatch tool, markets currently price the probability of a 25 basis point Fed rate hike in February at nearly 80%. Despite some policy makers opposing this market positioning, the US dollar had a hard time holding its ground against its rivals on Monday. Atlanta Fed President Raphael Bostic reiterated that the Fed is willing to maintain the highest rates until 2024and San Francisco Fed President Mary Daly told the Wall Street Journal that a case could be made for a 50 or 25 basis point rate hike at the next meeting.

However, markets appear to have turned cautious, with US stock index futures shedding between 0.2% and 0.25% early in the European morning. Meanwhile, the benchmark 10-year US Treasury yield is relatively quiet, slightly above 3.5% after dipping on Monday.

The EUR/USD rose to its highest level since early June on Mondayabove 1.0760, before entering a consolidation phase below 1.0750 early on Tuesday.

The GBP/USD managed to take advantage of Friday’s gains and rallied almost 100 pips before closing slightly below 1.2200 on Monday. The pair is moving slightly lower around 1.2170.

The USD/JPY it failed to move in either direction on Monday and closed the day largely unchanged. At time of writing, the pair is trading sideways slightly below 132.00.

The price of Gold topped $1,880 on Monday for the first time since early May, but erased much of its daily gains to close slightly higher. In the early European morning, XAU/USD is trading up and down in a tight range around $1,870.

The Bitcoin it posted small gains on Monday and is now trading sideways near $17,200. The ethereum It gained more than 2% on Monday and touched its highest level in almost four weeks near $1,350 before pulling back towards $1,300 on Tuesday.