🧠 Dollar firms, gold cools, markets brace for jobs data

Published: 1/8/2026

Good morning traders, from a cold and cloud-covered IntelliTrade desk here in Amsterdam. The snow and ice warnings are on, the coffee is hot, and today’s macro story is definitely one to sip slowly.

Overall Market Sentiment

Risk appetite is cooling but not collapsing. The dollar index has inched up again to around 98.7, its third straight daily gain, as investors trim expectations for near-term Fed cuts ahead of tomorrow’s US jobs report.

Equities are drifting off record highs: the S&P 500 is a little below 6,920 after yesterday’s small pullback, and US futures are slightly negative in early trade. Gold has slipped from the 4,500 area to roughly 4,430–4,450 as some profit-taking sets in, while Brent crude is hovering close to 60 dollars a barrel, held down by oversupply concerns despite the Venezuelan shock.

US 10-year yields are steady around 4.15 percent and the yield curve is modestly positive, which fits a narrative of “slower but not broken” growth: a cooling labour market, elevated real rates and financial conditions that are restrictive enough to matter but not tight enough to scream recession.

Geopolitics

Venezuela remains the key geopolitical backdrop. A US military strike that unseated President Nicolás Maduro and a follow-up deal to channel up to 2 billion dollars of Venezuelan crude toward the US have shaken regional politics and oil flows.

Oil’s reaction is telling: Brent is trading very close to 60 dollars and WTI near the mid-50s, as markets weigh short-term disruption against a larger structural surplus that some estimates put near 3 million barrels per day in early 2026. That combination is mildly disinflationary for big importers, a modest headwind for petro-currencies, and one reason rate-cut hopes remain alive despite stronger dollar levels.

At the same time, gold is still elevated after touching fresh records earlier in the week, supported by safe-haven demand linked to Venezuela and a broader unease around tariffs, fiscal policy and global politics. Brent near 60 and spot gold holding above roughly 4,400 are the two geopolitical “dials” markets are watching most closely right now.

Assumption: Venezuelan tensions remain contained to oil and regional diplomacy in the very near term, without a rapid widening into direct conflict with other major producers.

The week ahead: what markets are watching

This remains a data-heavy week, with a clear focus:

US labour market: After softer private payrolls and falling job openings, attention turns to Friday’s US nonfarm payrolls. Consensus clusters around 55–70k jobs and unemployment around 4.5–4.6 percent. A material miss either way could quickly reprice the Fed path and the dollar.

US inflation pipeline: Producer price data and labour-cost indicators today will help confirm whether disinflation is spreading through the pipeline or stalling.

Euro area inflation: Flash HICP around 2 percent keeps the ECB in “patient but not panicked” mode. Any upside surprise would matter for EUR crosses.

With that in mind, here is how the major currencies line up.

🔺 USD – firm ahead of payrolls, supported by yields

The dollar index is around 98.7, up roughly 0.1 percent on the day and marking a steady grind higher this week as labour data point to cooling, not collapsing, US momentum. US 10-year yields near 4.15 percent and a still-positive curve keep US real rates attractive, especially relative to economies where inflation is already comfortably at target.

Private payrolls rose only 41k in December and job openings fell more than expected, which has tempered talk of aggressive Fed hikes but also reduced the urgency for deeper cuts. Markets expect tomorrow’s official payrolls to land near 55–60k, with unemployment around 4.5 percent. Anything within that band would support the idea that the Fed can hold its 3.5–3.75 percent funds range for a while and cut only gradually later in 2026.

Near term, that mix of still-high nominal yields, a cooling but resilient labour market and geopolitical jitters leaves risks tilted toward a still-firm USD, especially against lower-yielding currencies. The key reference zone for many desks is 98–100 on the dollar index, with recent support near 98.3 and resistance starting just under 100.

🔻 EUR – softer against a firmer dollar, watching HICP

EURUSD is trading around 1.168, near the lower half of its recent range, with the stronger dollar doing most of the work in the pair. Eurozone inflation is drifting close to 2 percent and growth remains sluggish, which supports the narrative of an ECB that will cut, but likely more slowly and less aggressively than the Fed.

That relative policy stance should, in theory, limit downside for the euro over the medium term, yet in the very near term the currency is still driven by global risk appetite and US data. If tomorrow’s payrolls come in near or above consensus, the rate gap and safe-haven bid could keep EURUSD leaning lower.

Markets are broadly monitoring 1.16 as first important support and the 1.18 area as initial resistance that would likely require either softer US data or a firmer eurozone inflation surprise to break. For this week, risks look skewed to mild EUR underperformance versus the dollar, while EUR could be more stable on crosses where the local central bank is easier than the ECB.

🔻 GBP – sterling edges lower as UK growth lags

GBPUSD is trading around 1.346, slightly softer on the day as the stronger dollar and fragile UK growth backdrop weigh on sterling. The Bank of England cut Bank Rate to 3.75 percent in December and has signalled it is past the peak, but with inflation still above target and growth flat, markets expect only cautious, data-dependent easing in 2026.

The UK macro debate is shifting from “how high do rates go” to “how long can we sit in mildly restrictive territory without provoking a deeper slowdown”. In that environment, sterling often trades as a slightly higher beta version of the euro, outperforming when global risk appetite is strong and underperforming when the dollar is in demand.

For the week ahead, with little top-tier UK data on the docket, GBP is likely to follow the US data and broader risk tone. Many participants see the 1.34–1.35 band as a short-term pivot, and near-term risks are tilted toward further GBP softness versus USD if payrolls data support a still-firm dollar.

🔻 CAD – loonie pressured by soft oil and bullish USDCAD trend

USDCAD is trading around 1.384–1.386, close to recent highs, as oil hovers near 60 dollars and the Bank of Canada sits on a relatively low policy rate near 2.25 percent. The Venezuelan story points to more medium-term supply, not less, and the global oil market is widely seen as oversupplied into early 2026, which dulls one of CAD’s traditional tailwinds.

Domestically, Canadian growth has held up but is hardly booming, which keeps the BoC cautious and limits the scope for hawkish surprises to support the currency. In contrast, the Fed is holding rates in the mid-3s with 10-year yields still above 4 percent, which keeps rate differentials leaning in favour of the USD.

Near term, risks point to a still-soft CAD, especially if US data beat expectations. Many participants see the 1.38–1.39 zone as the upper part of the recent range and the 1.36 area as first meaningful support if oil firms or the dollar cools.

⚖️ CHF – safe haven supported, but dollar strength limits outperformance

USDCHF sits just under 0.80 and EURCHF trades in the low 0.93–0.94 area, keeping the franc relatively firm in trade-weighted terms. Low Swiss inflation and a policy rate around 0 percent mean real yields are not deeply negative, and the Swiss National Bank has little incentive to push back against moderate CHF strength as long as it remains orderly.

Geopolitical jitters around Venezuela and ongoing concerns elsewhere keep CHF attractive as a hedge, but the recent firming in the dollar caps how much the franc can outperform on the USD leg. Against the euro, stability reflects that both the ECB and SNB are in patient “on hold” mode.

This leaves near-term risks for CHF broadly balanced: any risk-off wobble could see fresh inflows, yet a stronger USD and steady yields mean the path is more sideways than trending for now. Many desks treat 0.79–0.80 in USDCHF as a key pivot and watch the low 0.93s in EURCHF as the region where talk of SNB discomfort might start to grow if reached quickly.

⚖️ JPY – stuck near 157 as US yields and BoJ normalisation offset

USDJPY trades around 156.7–157.0, near recent highs, as higher US yields still dominate despite Japan’s gradual shift away from ultra-easy policy. The Bank of Japan has already lifted rates from negative territory and signalled it is willing to tighten further if wages and inflation stay on track, which should be structurally supportive for the yen over time.

In the short run, however, 10-year US yields above 4 percent and the still-wide rate gap mean carry trades remain attractive, so JPY tends to weaken whenever risk sentiment is calm and the dollar is firm. Authorities in Tokyo remain sensitive to sharp moves, and the mid-150s are widely seen as a zone where verbal intervention risk increases if the yen slides too quickly.

With US labour data the key event tomorrow, the yen’s near-term risk profile is mixed: a soft jobs print and lower yields would likely support JPY, while a strong report could easily push USDJPY back toward the upper end of the 155–158 trading band.

🔺 AUD – supported by RBA stance and China optimism

AUDUSD is holding close to 0.67, one of the stronger spots in G10 FX, supported by a relatively hawkish Reserve Bank of Australia and cautious optimism about Chinese activity stabilising. The RBA cash rate at 3.6 percent, with inflation still above the 2–3 percent target, keeps markets pricing a non-trivial chance of further tightening later in 2026 if price pressures stay sticky.

AUD is also leveraged to global risk appetite and commodities, so the combination of elevated gold, still-decent industrial metals and only modest equity pullbacks is broadly currency-supportive. For this week, the main risk is US payrolls: a softer dollar on weak data plus steady Chinese indicators would likely keep risks tilted toward further AUD resilience, with 0.66 as a key support region and the high 0.67s as first resistance.

🔻 NZD – softer domestic story leaves kiwi lagging AUD

NZDUSD is trading around 0.576, near the lower half of its recent 0.575–0.58 band, reflecting a more dovish central bank and a softer domestic backdrop than in Australia. The Reserve Bank of New Zealand has already cut the Official Cash Rate to about 2.25 percent, with inflation back inside the 1–3 percent band and growth still below potential, which leaves the kiwi with less policy support than AUD.

Kiwi tends to behave like a higher-beta version of AUD when global risk appetite is strong, but the relative rate and growth story means NZD has underperformed over recent months. For the week ahead, with little local data, NZD is basically a function of US jobs numbers, China sentiment and overall risk tone.

Given that backdrop, risks remain tilted toward modest NZD underperformance, particularly against AUD and some of the higher-yielders, unless US data surprise clearly on the soft side and drive a broader dollar retreat. Traders are watching 0.57 on the downside and the 0.585–0.59 region as resistance that would likely require both a weaker USD and friendlier risk tone to test.

Cross-asset wrap

🪙 Gold:

Gold is consolidating after a very strong run, trading around 4,430–4,450 dollars an ounce after failing to hold above 4,500 earlier in the week. Softer US labour data, still-elevated geopolitical risk and the prospect of gradual further Fed easing keep the medium-term backdrop supportive, but in the near term the 4,400 area has become a key support zone that many in the market are watching.

🛢 Oil:

Brent is fluctuating around 60 dollars and WTI around 56, as a larger-than-expected US inventory draw collides with concerns about a sizeable global surplus and incoming Venezuelan barrels. The market is treating 60 dollars on Brent as a pivot: staying near or below that level supports disinflation and weighs on petro-currencies, while any renewed spike into the mid-60s on fresh supply disruptions would quickly reawaken inflation worries.

📈 Stocks:

After setting fresh records earlier in the week, US indices have started to slip: the S&P 500 is down about a third of a percent from yesterday’s close and Dow futures are softer as traders reassess stretched valuations in light of weaker labour data. The narrative is still “soft landing plus AI plus lower rates later”, but the jobs report on Friday is a clear event risk for this complacent pricing.

₿ Crypto:

Bitcoin is trading just above 91,000 dollars after pulling back from the mid-93,000s, reflecting a pause in the early-year recovery as the stronger dollar and higher real yields bite. Crypto remains mostly a high-beta expression of global liquidity and risk appetite: a softer NFP and lower yields would likely favour another leg higher, while a strong jobs print and firmer dollar could keep prices in consolidation mode.

This is general, educational macro and FX commentary. It is not investment advice and not a trading signal.

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