Published: 2/3/2026

Good morning traders from a cold and cloudy IntelliTrade desk. It is sitting a couple of degrees below freezing with a yellow snow and ice warning for later, so the streets may be slippery but the macro tape is anything but sleepy, so top up the coffee and let’s get into it.

Overall Market Sentiment

Markets are in a cautious, slightly risk-on but dollar-supported mood. The Dollar Index is sitting around 97.4, just off yesterday’s high but still well above last week’s lows, as stronger US manufacturing data and the Kevin Warsh nomination keep rate cut expectations trimmed.

Gold, which plunged below 4,600 dollars yesterday, is bouncing about 3 to 4 percent and trading back near the 4,800 area, while silver and other metals also claw back some of their losses.Oil continues to drift lower on hopes of US–Iran de-escalation, and the S&P 500 closed around 6,976, just shy of a record, which signals that equities are still willing to look through the metals shock for now.

Geopolitics and policy

On the geopolitical side, tension premium is leaking out of crude. Brent is now around 65.9 dollars and WTI near 61.8 dollars, marking a second day of declines as markets increasingly price the possibility of renewed US–Iran talks instead of imminent escalation. A firmer dollar and milder weather expectations are reinforcing that downside pressure.

Policy wise, the big story remains the “Warsh shock” at the Fed. President Trump’s official nomination of Kevin Warsh to replace Jerome Powell has pushed markets toward a more hawkish Fed path, with Fed funds futures scaling back rate cut expectations and the dollar stabilising after January’s slide.This shift, combined with recent margin hikes, triggered one of the steepest two-day drawdowns in gold and silver in decades, although today’s rebound shows that the broader bull narrative in metals is not gone.

There is also a trade and growth angle. Trump’s announcement of a new US–India trade deal and planned tariff reductions is being read as mildly supportive for global risk appetite, especially in Asia, where some indices like the KOSPI have started to recover part of yesterday’s losses.

Key global reference levels today:

• DXY around 97.4, trying to consolidate a base after January’s drop.
• Spot gold near 4,800–4,850, still well below last week’s peak but bouncing from a near term low.
• Brent around 66 dollars, WTI near 61.8 dollars, as the barometer of US–Iran risk and global demand.

Today and the rest of the week

Today, Tuesday

• The focus is on the aftermath of the ISM beat and Warsh nomination. Manufacturing PMI at 52.6, the strongest since 2022, reinforced the view that US growth is solid enough to justify a patient Fed and fewer cuts, which in turn supports the dollar and weighs on precious metals.
• The RBA has already delivered a 25 basis point hike to 3.85 percent, its first move in over two years, and signalled that further tightening is possible if inflation stays sticky. The Aussie jumped back above the 0.70 handle in response.

Rest of the week

• A partial US government shutdown is delaying the official nonfarm payrolls report, which means traders will lean more heavily on private-sector labour data and ISM services to infer the jobs picture.
• In Europe and the UK, attention builds toward the ECB and BoE meetings, where no moves are expected but any guidance around the first cut will be crucial for EUR and GBP.
• Across Asia and Oceania, markets will digest the RBA hike, key Chinese data and New Zealand labour figures, which together will help determine how durable the recent outperformance in AUD and NZD really is.

Currency outlooks

🔺 USD – Backed by data and Warsh, but still watched closely

The Dollar Index around 97.4 is slightly softer intraday but has risen for several sessions in a row, helped by stronger US manufacturing data and the prospect of a more hawkish Fed chair.Futures pricing now implies fewer rate cuts for 2026 than a month ago, which reduces the appeal of aggressive dollar shorts that were built during the late-2025 slide.

At the same time, the dollar is not in a one-way regime. Valuations are still rich on some measures, fiscal and political risks remain elevated, and the rebound has come against a backdrop of volatile metals and risk assets, not a clean risk-on or risk-off trend. Overall, risks for USD in the coming days lean mildly to the upside, with the key question being whether incoming data can keep justifying the more hawkish expectations that Warsh’s nomination has created.

Markets are watching the 97.0 area on DXY as near support and the 98.0 region as the first resistance band that would need to break to talk about a more durable bull phase.

🔻 EUR – Off the highs as dollar strength and ECB caution meet

EURUSD is trading near 1.18–1.181, down from last week’s test above 1.20 as renewed dollar strength and modest Eurozone data take some shine off the single currency.Recent European numbers have been mixed rather than clearly improving, and with the ECB signalling patience and emphasising data dependence, markets are less inclined to extrapolate a rapid euro uptrend from here.

For the rest of this week, risks for EUR versus USD look tilted to mild downside, largely because the macro narrative is currently dominated by US policy and data rather than a positive Eurozone growth surprise. Any softer US prints or a dovish communication surprise from the Fed side would help EUR recover, but the burden of proof has shifted back onto European data if the pair is to reclaim and hold the 1.20 handle.

Key reference areas: 1.18 as nearby support, where the lower line of recent ranges sits, and 1.20–1.21 as resistance, now clearly defined after the failed breakout.

⚖️ GBP – Elevated and range-bound ahead of the BoE

GBPUSD sits around 1.369, not far from the recent 4-year highs near 1.38, as the pound balances firm domestic yields against a stabilising dollar.The UK still has relatively high wage and services inflation, which encourages the Bank of England to move cautiously on cuts, but growth is only moderate, and there is little appetite to push a significantly more hawkish line right before Thursday’s decision.

Near term, risks for GBP versus USD look mixed. Sterling remains supported by carry and by the earlier dollar weakness, yet it is trading at the richer end of its multi-month range and is sensitive to any combination of stronger US numbers, a deeper global risk wobble or a more cautious BoE tone on the outlook. The 1.36–1.37 band is now seen as first support, with 1.38–1.40 as the zone where many investors are reluctant to chase further upside without fresh UK data surprises.

🔻 CAD – Oil slide and firmer greenback pressure the loonie

USDCAD is trading in the 1.36–1.37 region, up from last week’s lows near 1.35 as the combination of a stronger dollar and a lower oil price chips away at earlier Canadian dollar gains.Brent’s drop back toward 66 dollars removes some of the terms-of-trade support that Canada enjoyed during the Iran scare, even though domestic data and inflation remain broadly in line with the Bank of Canada’s target.

For this week, risks for CAD versus USD lean slightly toward weakness. If oil continues to drift or if US data beat expectations again, USDCAD can grind higher within its broad 1.35–1.39 range, even if the longer term picture still features a more resilient CAD than in 2025. Traders are watching 1.35 as strong support for CAD strength and 1.38 as the first resistance band where dollar rallies have tended to stall so far this year.

🔺 CHF – Quiet haven strength resumes as USDCHF edges lower

USDCHF is around 0.778, down a touch from yesterday, which keeps the franc firmly on the strong side of its recent range against the dollar.Low Swiss inflation and a still very low policy rate mean that the Swiss National Bank can tolerate a strong currency as a buffer against imported price pressures, especially while global risk appetite remains fragile after the metals rout.

Short term, risks for CHF versus USD lean modestly to further strength, although not in a dramatic way. If the dollar rally stalls below 98 on DXY or if there is another wave of risk aversion tied to metals or politics, USDCHF can drift lower again within the current 0.77–0.79 corridor. Markets highlight 0.77 as near support in USDCHF, with 0.79–0.80 as resistance where recent rebounds have tended to fade.

🔻 JPY – Back near the highs as yield gap and Fed story dominate

USDJPY is trading in the mid 155s, having risen again after briefly easing yesterday, as the combination of a firmer dollar and still very low Japanese rates keeps the yen under pressure.The Bank of Japan policy rate at 0.75 percent remains far below US levels, and while officials have talked about a gradual normalisation, recent data from Tokyo have not forced a major hawkish shift.

Finance ministry comments have tried to lean against excessive yen weakness, yet with the Fed path turning more restrictive in market pricing, risks for JPY in the near term still lean toward further weakness, unless we see a sharp risk-off move or explicit intervention headlines. The 155–157 zone is increasingly seen as a “discomfort area” where rhetorical pushback tends to increase, while 153 is the first meaningful support level for any yen recovery.

🔺 AUD – RBA hike keeps Aussie bid despite stronger dollar

AUDUSD has rebounded back above 0.70, with intraday trades reported around 0.703–0.704, after the RBA lifted its cash rate by 25 basis points to 3.85 percent and signalled that further hikes are possible if inflation does not cool.The move confirms that Australia is still in a late-cycle tightening phase, which supports carry and helps offset the headwind from a somewhat stronger US dollar and softer risk appetite.

For the coming days, AUD risks versus USD lean to the upside, but with volatility likely around post-decision commentary and global risk moves. The pair is also sensitive to any fresh swings in metals and Chinese data. The 0.695–0.70 band is now key support, with 0.71 as the immediate resistance level that would need to break convincingly to open up another leg higher.

⚖️ NZD – Still hanging near 0.60, high beta to global mood

NZDUSD is hovering around 0.606–0.607, a touch below last week’s high near 0.609 but still comfortably above the late-January lows, as the kiwi juggles a firmer dollar with a still supportive domestic story.Inflation in New Zealand surprised on the upside recently, and markets see a reasonable chance that the RBNZ may need to tighten later this year, although the exact timing is uncertain, which gives NZD some rate support compared with low-yielders.

At the same time, NZD remains a classic high beta risk proxy, especially sensitive to swings in equities, metals and global growth sentiment. For this week, risks for NZD versus USD look broadly balanced: a sustained recovery in metals and stable global risk appetite would favour further modest gains, whereas any renewed risk-off wave or a sharper dollar rally would likely push NZDUSD back toward the 0.60 handle or slightly below. The 0.60 area is key support, with 0.61–0.62 as the next resistance band on the topside.

Cross-asset wrap

• 🪙 Gold:
  Gold has started to stabilise after a brutal two day selloff that took it from above 5,500 dollars to below 4,600, with spot now rebounding around 3 to 4 percent to trade near 4,800–4,850. The pullback reflects a firmer dollar, margin hikes and the Warsh nomination, yet analysts still frame the move as a violent correction within a larger bull trend driven by central bank buying, fiscal concerns and diversification away from fiat assets.
• 🛢 Oil:
  Brent is around 65.9 dollars and WTI about 61.8 dollars, extending yesterday’s drop as traders reassess the probability of US–Iran escalation and focus more on supply and demand fundamentals. A stronger dollar has added modest downside pressure, but prices are still significantly above late-2025 levels, so energy remains an important swing factor in inflation expectations and in the relative performance of commodity currencies.
• 📈 Stocks:
  The S&P 500 closed near 6,976, just shy of a record high, with Monday’s session marked by a strong rebound from early weakness as US manufacturing data surprised to the upside and the metals rout began to cool. Under the surface, however, sectors tied to commodities and some high beta tech have seen heavier rotation, which matches the theme of a market that is still risk-positive overall but much more selective after the Warsh shock.
• ₿ Crypto:
  Bitcoin has slipped below the 80,000 mark, with volumes thinning out and sentiment fragile as a stronger dollar, higher yields and the commodities shake-out all weigh on the broader risk complex. Crypto continues to trade as a high beta expression of liquidity and tech sentiment rather than a primary safe haven, so this week’s central bank signals and US labour indicators are likely to be more important for direction than coin specific headlines.

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

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