Good morning traders from a grey, low-cloud IntelliTrade desk where the sky looks sleepy, the air sits around 4–8°C, and the only bright spots right now are on the charts for gold and the Aussie. Hope your coffee is hot, because the macro tape is busy today.
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Overall Market Sentiment
Risk mood is cautiously positive. Global equities are grinding higher for a third session as the Greenland tariff scare fades and strong US data keep recession fears in check.
The US dollar index is near 98.3–98.4, close to its weakest levels of the year and set for its worst week in about twelve months, while 10 year Treasury yields hover just above 4.24 percent and the VIX has pulled back toward the mid teens. Gold has surged to another record around 4,950–4,970 dollars an ounce, up nearly 80 percent year on year, and silver and platinum are also printing fresh highs.
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Geopolitics and policy
The Greenland drama has stepped down from crisis mode to slow burn. Washington has shifted from explicit tariff threats to talking about a future “framework” with European allies, which has removed the immediate risk of a new transatlantic trade war and allowed European and US equities to recover most of this week’s losses.
At the same time, geopolitical tension is still very present elsewhere. Fresh comments about sending an “armada” toward Iran have pushed oil and energy volatility higher, with Brent trading around 64.5 dollars and WTI just under 60 dollars as traders reprice the odds of supply disruptions from the Middle East.
On the policy side, the Bank of Japan has just kept its policy rate at 0.75 percent in an 8–1 vote, but raised inflation forecasts and kept the door open to further gradual tightening. The yen, however, has weakened slightly, with USDJPY around 158.5–159.0, and markets are still wary that a break above 160 could eventually test the patience of Japanese authorities.
In the US, revised figures show Q3 2025 GDP at 4.4 percent annualised, the strongest pace in two years, while the latest core PCE data came in at 0.2 percent month on month and 2.8 percent year on year, exactly in line with expectations. That combination of strong growth and still slightly above target inflation leaves the market assuming the Fed stays patient rather than rushing into cuts.
Key barometers to watch:
• Spot gold around 4,950–4,970 dollars as the crisis hedge of choice.
• USD index holding near 98.3, still soft but trying to stabilise.
• USDJPY near 159, where any lurch toward 160 keeps intervention chatter alive.
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Today and the rest of the week: key macro events
Today (Friday)
• Final market digestion of yesterday’s US GDP and PCE numbers that confirmed strong growth and still sticky but contained inflation.
• Bank of Japan press conference, with markets laser focused on any hints that more hikes could come later in 2026 and on comments about yen weakness.
• UK and Canada retail sales, important for how the BoE and BoC balance weak growth against still tight labour markets.
Into next week
• Early week: follow through on the gold and dollar story as traders position for central bank meetings and more earnings.
• Week of 26 January: a packed calendar with inflation updates and central bank rhetoric in the US, Australia and Europe that will shape how many cuts are still priced for the rest of 2026.
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Currency outlooks
⚖️ USD – Weak week, but strong data keep a floor under the dollar
The dollar index is hovering near 98.3–98.4, down roughly 0.6 percent from the prior session and on track for its largest weekly drop in about a year as investors rotate into non US assets and metals.
Yet the macro backdrop is anything but soft. US GDP at 4.4 percent annualised and core PCE running about 2.8 percent year on year suggest an economy that is still expanding briskly with inflation only slowly converging toward target. That mix gives the Fed room to hold rates in the current 3.5–3.75 percent band for longer, and 10 year yields just above 4.24 percent keep the US firmly at the top of the developed market yield table.
Near term, the dollar is caught between political and positioning headwinds on one side and solid growth and yield support on the other. For the next few sessions, risks look broadly balanced: any fresh spike in equity volatility or hawkish Fed tone could give USD a lift, but if risk appetite stays firm and gold keeps grinding higher, the index can easily stay pinned in the lower part of its recent 98–100 range.
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⚖️ EUR – Supported by softer USD, capped by growth and rate differentials
EURUSD is trading just under 1.175, having rebounded sharply from the 1.166 area earlier in the week as the dollar sold off and the Greenland tariff scare faded.
The euro is benefiting from the absence of fresh trade threats and from a perception that policy paths are gradually converging, with the Fed seen closer to neutral and the ECB no longer needing to sound as hawkish as in 2023–2024. At the same time, 10 year Bund yields around 2.9 percent versus over 4.2 percent for Treasuries keep a meaningful rate disadvantage in place.
Heading into next week, Eurozone flash PMIs and ongoing corporate commentary will matter for whether markets see the region as stuck in stagnation or slowly emerging from it. For now, EUR risks look mixed: supported against USD by flows out of US assets and reduced trade tension, but still constrained by weaker growth and lower yields.
Key levels markets are watching: roughly 1.16 as near support and the 1.18–1.19 band as the upper resistance zone that would need to break to signal a more durable euro upswing.
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🔻 GBP – Strong week against USD, but macro cracks still show
GBPUSD is sitting around 1.35, at the upper end of its recent range, after a solid run higher supported by improved risk appetite and a softer dollar.
Today’s UK retail sales are in focus. A firm print would help justify the market’s view that the Bank of England can keep rates steady for longer, but underlying growth remains fragile and prior forecasts have flagged the 1.35 area as a potential barrier unless data decisively improve.
Given that the pound is already near the top of its 1.33–1.35 comfort zone and that UK activity data have not fully turned the corner, risks look mildly tilted to the downside for GBP over the coming week, especially if global risk sentiment wobbles or if domestic data disappoint.
Key levels: the 1.33–1.35 range remains the primary band desks are monitoring, with a sustained break below 1.33 seen as a sign of renewed growth anxiety.
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⚖️ CAD – Balanced between firmer oil and a still cautious BoC
USDCAD is hovering near 1.379–1.38, consolidating after a four day drift lower from the 1.39 handle as oil prices stabilise and the dollar softens.
Brent around 64.5 dollars and WTI just under 60 provide a modest tailwind for Canada, while domestic inflation near 2.4 percent keeps the Bank of Canada comfortably within its target band but leaves it with a bit more room to ease than the Fed if needed.
For the next few days, CAD risks look roughly balanced: a continued grind higher in oil and stable global risk sentiment would support mild CAD outperformance, while any renewed dollar rebound or risk off shock could push USDCAD back toward 1.39–1.40.
Key levels: about 1.37 is seen as near term support and 1.40 as a broad resistance zone that has capped the pair in recent months.
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🔺 CHF – Haven premium softens but still present
After a sharp rally earlier in the week, the Swiss franc has eased slightly but remains firm, with USDCHF around 0.79 and EURCHF in the low 0.93s.
A calmer Greenland backdrop reduces the immediate need for extreme safety trades, yet lingering concerns about US political risk, high debt and central bank independence keep CHF attractive as a structural hedge, especially while Swiss inflation stays very low and the policy rate hovers near zero.
Short term, risks still lean modestly in favour of CHF strength, particularly versus higher beta currencies, even if the pace is slower now that some of the most acute trade tension has faded.
Key levels: EURCHF around 0.92–0.94 looks like the current comfort zone markets assume the Swiss National Bank is willing to tolerate.
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🔻 JPY – BoJ slightly more hawkish, yen still struggling near 160
The yen remains under pressure despite today’s BoJ decision. USDJPY is trading around 158.5–159.0, only a short distance from the psychological 160 level, after the central bank kept rates at 0.75 percent but nudged inflation forecasts higher and signalled that further gradual tightening remains possible.
In practice, deeply negative real yields and decades of ultra loose policy mean investors still see JPY as a funding currency rather than a pure safe haven, which is why it has not benefited much from the earlier tariff scare. Strategists widely note that authorities may become more vocal if USDJPY breaks and holds above 160, but clear red lines remain deliberately vague.
For the days ahead, risks for JPY remain tilted toward weakness, with an important caveat: any surprise hawkish shift in BoJ language or a sharp equity selloff could trigger fast, possibly short lived yen strength as carry positions are cut back.
Key levels: the 158 area is near support and 160 is the high profile line that markets associate with possible intervention risk.
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🔺 AUD – Top of the G10 performance table, riding growth and metals
The Australian dollar is one of the clear winners of early 2026. AUDUSD is trading around 0.684–0.685, its highest level since late 2024, after a strong jobs report and persistent support from metals and risk appetite.
Markets have been edging up the probability of another Reserve Bank of Australia hike in coming meetings, which narrows the yield gap with the US at a time when the dollar is on the back foot and global cyclicals are doing better.
For the rest of this week and into next, risks for AUD remain tilted to the upside, provided risk sentiment stays constructive and commodity prices hold near current levels. A lot of good news is now in the price, however, so any negative surprise in Chinese data or global growth could still trigger a sharp shakeout.
Key levels: the 0.672–0.675 area now acts as first support, with 0.69 the next resistance band that traders are flagging on charts.
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🔺 NZD – Inflation surprise lifts kiwi to multi month highs
NZDUSD has jumped to around 0.591, the highest level since September last year, after New Zealand inflation for Q4 printed at 3.1 percent year on year, slightly above both the prior 3.0 percent and consensus forecasts.
The data keep price growth above the upper bound of the Reserve Bank of New Zealand’s 1–3 percent target range, which in turn reduces the near term pressure on the central bank to cut and adds some rate support back under the kiwi. Combined with a weaker dollar and improved global risk appetite, that has helped NZD play catch up after underperforming through late 2025.
Into next week, risks for NZD look modestly tilted to further strength against USD, although its higher beta profile means it is still vulnerable if equity sentiment sours or if global yields spike again. Versus AUD, the kiwi may struggle more, given that Australia currently offers a stronger growth and commodity story.
Key levels:0.58 now looks like near support, with 0.60 as the big upside reference area that would need to give way to signal a deeper trend change.
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Cross-asset wrap
• 🪙 Gold:
Gold has pushed to fresh record highs around 4,960–4,970 dollars an ounce, up more than 7 percent this week and nearly 80 percent over the past year. The move reflects a mix of weaker confidence in US assets, ongoing geopolitical risk and worries about central bank independence, rather than a simple inflation trade. As long as real yields stay contained and political risk remains part of every macro conversation, gold is likely to retain a significant risk hedge premium.
• 🛢 Oil:
Brent crude is trading around 64.5 dollars and WTI near 59.8, after rebounding from a dip when tariff threats were softened but getting fresh support from renewed Iran related supply concerns. Inventories in the US remain comfortable, which is limiting the upside, so the market is oscillating between geopolitical risk and a still solid but not booming demand outlook.
• 📈 Stocks:
US and European indices have strung together two solid up days, clawing back most of the drop from the Greenland panic earlier in the week. Cyclical and tech names are doing well as investors express a preference for non US assets and for sectors that benefit from strong nominal growth and easy financing conditions, though valuations are getting stretched and volatility could pick up again around upcoming earnings and central bank messages.
• ₿ Crypto:
Bitcoin is stuck in a wide consolidation band around 89,000–90,000 dollars, with option expiries today and a weak risk reward profile weighing on sentiment. The broader crypto complex is still behaving like a high beta macro asset, reacting more to dollar swings, real yields and equity volatility than to coin specific headlines, which means the same forces driving gold and global stocks are also steering crypto, just with a bigger amplitude.
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This is general, educational macro and FX commentary. It is not investment advice and not a trading signal.
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