Forex Today: EU inflation and US employment data could be decisive

What you need to take care of on Friday, January 6:

The American Dollar aimed higher early Thursday, backed by the echoes of a hawkish Fed. It gained additional momentum ahead of Wall Street’s opening following the release of upbeat US employment-related figures.

The United States Challenger Job Cuts report showed that layoffs were down to 43.651K in December from 76.835K in the previous month. Additionally, the ADP survey on Employment Changed showed that the private sector created 235,000 new positions in the same month, much better than anticipated. Finally, Initial Jobless Claims declined to 204,000 in the last week of December. The upbeat figures hint at an upcoming solid December Nonfarm Payrolls report to be out this Friday. Also, the Euro Zone will publish fresh inflation data. The December Harmonized Index of Consumer Prices (HICP) is expected to have increased at an annual pace of 9.7%

Kansas City Federal Reserve Bank President Esther George said that high inflation still needs Fed intervention, while she noted that the central bank would maintain ratest until 2024, aligned with FOMC’s hawkish stance. Also, St. Louis Fed President Jim Bullard said that inflation would likely ease more slowly than markets anticipate, reinforcing the idea of a continuously aggressive Federal Reserve’s monetary policy.

European Central Bank member French central bank chief Francois Villeroy noted that the ECB should aim to reach the terminal rate by Summer.

The EUR/USD pair fell to a fresh weekly low of 1.0514, recovering a few pips ahead of the close. GBP/USD finally gave up to US Dollar demand and fell towards 1.1900. The USD/JPY pair extended its advance and trades at around 133.30.

Commodity-linked currencies were among the most volatile, posting substantial losses against the Greenback. AUD/USD trades around 0.6760, while USD/CAD hovers around 1.3570.

Spot gold settled at $1,832 a troy ounce, with buyers still taking their chances on dips. Crude oil prices consolidate near weekly lows. WTI changes hands at $73.60 a barrel.

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