Robert J. Williams 
Market Overview
As we move into Friday, the financial markets are experiencing a lull in activity as investors await the release of preliminary February Manufacturing and Services Purchasing Managers’ Index (PMI) data from major economies such as Germany, the Eurozone, the UK, and the US. In addition to the PMI data, the US economic calendar is set to release Existing Home Sales data for January, alongside speeches from several Federal Reserve policymakers as we head into the weekend.
US Dollar Performance
After a brief two-day recovery, the US Dollar Index faced renewed bearish pressure during Thursday’s American trading hours, falling to its lowest level in over two months, around 106.30. This decline was attributed to the latest US data, which revealed an increase in weekly Initial Jobless Claims to 219,000 from 214,000. Additionally, the benchmark 10-year US Treasury bond yield dropped below 4.5%, further weighing on the USD. Early Friday, the index is seen consolidating around 106.50.
US Dollar Price Movement This Week
The table below highlights the percentage change of the US Dollar against major currencies this week, with the US Dollar showing the most significant weakness against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | – | -0.01% | -0.68% | -1.17% | 0.00% | -0.61% | -0.68% | -0.08% |
| EUR | 0.01% | – | -0.52% | -1.20% | 0.11% | -0.52% | -0.58% | 0.03% |
| GBP | 0.68% | 0.52% | – | -0.59% | 0.63% | 0.05% | -0.06% | 0.55% |
| JPY | 1.17% | 1.20% | 0.59% | – | 1.18% | 0.60% | 0.71% | 1.07% |
| CAD | -0.00% | -0.11% | -0.63% | -1.18% | – | -0.59% | -0.69% | -0.09% |
| AUD | 0.61% | 0.52% | -0.05% | -0.60% | 0.59% | – | -0.06% | 0.55% |
| NZD | 0.68% | 0.58% | 0.06% | -0.71% | 0.69% | 0.06% | – | 0.61% |
| CHF | 0.08% | -0.03% | -0.55% | -1.07% | 0.09% | -0.55% | -0.61% | – |
The heat map above shows the percentage changes of major currencies against each other. The base currency is selected from the left column, while the quote currency is selected from the top row. For instance, if you select the US Dollar from the left column and move horizontally to the Japanese Yen, the percentage change displayed represents USD (base)/JPY (quote).
Global Economic Indicators
In the early Asian session, Japan’s National Consumer Price Index (CPI) data showed a 4% year-on-year increase in January, up from 3.6% in December. Bank of Japan Governor Kazuo Ueda noted that more interest rate hikes could be considered if the price outlook continues to improve, which might have unpredictable impacts on the economy. Following a loss of over 1% on Thursday, USD/JPY is rebounding on Friday, last seen rising about 0.6% to 150.50.
In Australia, the Jibun Bank Composite PMI edged higher to 51.2 in January from 51.1, indicating modest expansion in the private sector’s economic activity. Reserve Bank of Australia Governor Michele Bullock stated that they would remain cautious about further policy easing. After reaching its highest level since early December above 0.6400, AUD/USD corrected lower towards 0.6380 in the early European session.
The UK’s Office for National Statistics reported a 1.7% monthly increase in Retail Sales for January, following a 0.6% decrease in December, significantly surpassing the market expectation of 0.3%. GBP/USD holds its ground in the European morning, trading at a fresh two-month high above 1.2670.
EUR/USD benefited from the broad-based USD weakness, rising over 0.7% on Thursday. The pair is fluctuating in a narrow band around 1.0500 early Friday.
Commodity Markets
Gold reached another record high above $2,950 on Thursday but struggled to maintain its bullish momentum. In the European morning, XAU/USD is trading in negative territory near $2,930.
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