FX Today: US economic reports continue to take the spotlight

The US Dollar (USD) lacked a clear trend on Wednesday, losing some of its early-year momentum. Looking ahead, the currency is likely to remain in focus as investors await crucial data releases that could influence the Federal Reserve’s interest rate decisions in the coming months.

Key Events to Monitor on Thursday, January 8

The US Dollar Index (DXY) fluctuated around the mid-98.00s, as market participants digested mixed signals from the US ADP employment report and the ISM Services PMI. Upcoming releases include the weekly Initial Jobless Claims, Challenger Job Cuts, Balance of Trade figures, and the Unit Labor Cost index.

EUR/USD edged higher but struggled to convincingly surpass the 1.1700 level. Investors will be watching for Germany’s Factory Orders, as well as Producer Prices, the Unemployment Rate, and the final Consumer Confidence reading for the euro area. Additionally, the ECB is set to release its Consumer Inflation Expectations, and Vice President De Guindos will deliver a speech.

GBP/USD experienced a notable decline, extending losses after being rejected from multi-week highs near 1.3570 on Tuesday. Key UK data on the horizon includes the Halifax House Price Index, the BBA Mortgage Rate, and the Bank of England’s Decision Maker Panel (DMP) survey.

USD/JPY remained relatively stable, hovering near 156.70 as the broader foreign exchange market showed little direction. In Japan, attention will turn to Average Cash Earnings, weekly Foreign Bond Investment statistics, and the Consumer Confidence index.

AUD/USD pulled back after three consecutive days of gains, retreating to the 0.6720 area even as the US Dollar showed no decisive trend. Australia’s Balance of Trade report will be the main economic highlight.

WTI crude oil prices continued their downward correction from Tuesday, slipping below $56.00 per barrel as traders weighed ongoing developments in US-Venezuela relations.

Gold faced significant selling pressure, erasing three days of gains and briefly touching the $4,420 per troy ounce mark, its lowest in two days. Silver also surrendered some of its recent strong advances, approaching $76.00 per ounce on Wednesday.