This is what you need to know to operate today Wednesday, February 5:
After weakening in front of its main rivals due to the improvement of appetite for risk and the disappointing US data on Tuesday, the US Dollar (USD) Fight to maintain your position early on Wednesday. Later in the session, the US economic calendar will include the data change data of ADP and the Purchase Managers Index (PMI) of ISM Services for January. Investors will continue to scrutinize the comments of the officials of the central banks throughout the day.
US dollar price this week
The lower table shows the percentage of the US dollar change (USD) compared to the main currencies this week. The US dollar was the weakest currency against the Canadian dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.34% | -0.79% | -1.07% | -2.66% | -0.91% | -1.35% | -1.27% | |
| EUR | 0.34% | -0.05% | 0.59% | -1.05% | -0.12% | 0.29% | 0.36% | |
| GBP | 0.79% | 0.05% | -0.46% | -1.00% | -0.06% | 0.34% | 0.41% | |
| JPY | 1.07% | -0.59% | 0.46% | -1.61% | 0.30% | 0.65% | 0.43% | |
| CAD | 2.66% | 1.05% | 1.00% | 1.61% | 0.69% | 1.35% | 1.43% | |
| Aud | 0.91% | 0.12% | 0.06% | -0.30% | -0.69% | 0.40% | 0.47% | |
| NZD | 1.35% | -0.29% | -0.34% | -0.65% | -1.35% | -0.40% | 0.08% | |
| CHF | 1.27% | -0.36% | -0.41% | -0.43% | -1.43% | -0.47% | -0.08% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the US dollar of the left column and move along the horizontal line to the Japanese yen, the percentage change shown in the box will represent the USD (base)/JPY (quotation).
The USD index lost about 0.4% on Tuesday after the US Labor Statistics Office reported that Jolts employment offers decreased to 7.6 million in December, below the expectation of the market of 8 million. In addition, the main Wall Street indices gained traction after the opening bell, pointing out a positive change in the feeling of the market that did not allow the USD to star in a rebound. However, in the early hours of Wednesday, the futures of the stock market rates of the US operate in negative territory.
During Wednesday’s Asian negotiation hours, the US Customs and Border Protection Office issued a notice that additional 10% tariffs will be applied to Hong Kong, as well as Continental China. Meanwhile, China’s data showed that the Caixin Services PMI decreased to 51 in January from 52.2 in December.
He EUR/USD It benefited from the general weakness of the USD and recorded daily profits on Tuesday. The pair clings to small daily profits but remains below 1,0400 on Wednesday morning. Eurostat will publish the production index data for December later in the session.
Japan Economy Minister Ryosei Akazawa said Wednesday that the government’s approach is to eradicate Japan’s deflationary mentality. “With an ambitious objective to increase minimum wages, the government is trying to eradicate the deflationary mentality,” he added. He USD/JPY It is maintained under a strong bearish pressure at the beginning of the European session and trades at its lowest level since mid -December about 153.00.
He GBP/USD He closed in positive territory for the second consecutive day on Tuesday. The pair remains relatively calm and fluctuates in a narrow channel below 1,2500 in Wednesday’s European morning.
The unemployment rate in New Zealand rose to 5.1% in the fourth quarter from 4.8% in the third quarter, said Statistics New Zealand on Wednesday. This reading was in line with the market expectation and did not cause a notable reaction in the market. At the time of publication, the NZD/USD It was quoted slightly on the day, above 0.5650.
He Gold It preserves its upward impulse and quotes in a new historical maximum above $ 2,860. The climbing of geopolitical tensions after the US president, Donald Trump, proposed to reassure the Palestinians in neighboring countries seems to be feeding the Xau/USD rally.
FAQS GOLD
Gold has played a fundamental role in the history of mankind, since it has been widely used as a deposit of value and a half of exchange. At present, apart from its brightness and use for jewelry, precious metal is considered an active refuge, which means that it is considered a good investment in turbulent times. Gold is also considered a coverage against inflation and depreciation of currencies, since it does not depend on any specific issuer or government.
Central banks are the greatest gold holders. In their objective of supporting their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perception of strength of the economy and currency. High gold reserves can be a source of trust for the solvency of a country. Central banks added 1,136 tons of gold worth 70,000 million to their reservations in 2022, according to data from the World Gold Council. It is the largest annual purchase since there are records. The central banks of emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has a reverse correlation with the US dollar and US Treasury bonds, which are the main reserve and shelter assets. When the dollar depreciates, the price of gold tends to rise, which allows investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rebound in the stock market tends to weaken the price of gold, while mass sales in higher risk markets tend to favor precious metal.
The price of gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of gold to rise rapidly due to its condition of active refuge. As an asset without yield, the price of gold tends to rise when interest rates lower, while the money increases to the yellow metal. Even so, most movements depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (Xau/USD). A strong dollar tends to keep the price of gold controlled, while a weakest dollar probably thrusts gold prices.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
