Forex Today: Waiting about to end, does not look good for the US Dollar

What you need to take care of on Thursday, January 12:

Market players held their breath for a second consecutive day, with major pairs holding on to familiar levels. Tensions mounted ahead of the release of the December US Consumer Price Index (CPI), with the focus on central banks’ officials.

European Central Bank (ECB) officials were mostly hawkish, underpinning the EUR. French central bank governor Francois Villeroy de Galhau said the ECB should aim to reach the terminal rate by the summer, confirming they would have to raise rates further in the coming months. Governor of Austria’s central bank Robert Holzmann opted for a more aggressive stance, noting that “rates will have to rise significantly further to reach levels that are sufficiently restrictive to ensure a timely return of inflation to target.” He finally added that it’s too early to discuss a possible terminal rate. Finally, ECB’s Governing Council member Olli Rehn said that rates in the Euro Zone will still have to rise significantly in the next couple of meetings and reach restrictive levels to dampen inflation.  

Across the pond, US Federal Reserve’s Boston representative Susan Collins supported smaller rate hikes. Collins said that she thinks 25 bps or 50bps  would be reasonable, adding she leans at this stage to a 25 bps hike, but clarifying it is very data-dependent.

The Kremlin restated that President Vladimir Putin is open to talks on Ukraine, although adding that an arrangement should be on Russian terms. A peaceful solution to the conflict remains far away.

EUR/USD keeps hovering around 1.0750, unchanged for a second consecutive day, while GBP/USD settled around 1.2140. The AUD/USD pair started the day on the back foot, but trimmed losses and posted a modest advance, trading just above the 0.6900 level. The USD/CAD pair hovers around 1.3420, while USD/JPY  stands at 132.40.

Gold hit a fresh eight-month high of $1,886.63 a troy ounce, but retreated ahead of Wall Street’s opening, ending the day with modest gains at around $1,877.00.

Crude oil prices rallied, helped by a report from the US Energy Information Administration (EIA) as the organism expects global consumption of liquid fuels such as gasoline, diesel, and jet fuel, to set new record highs in 2024. The headline overshadowed a large build in US stockpiles.

Attention on Thursday will be on the United States Consumer Price Index, foreseen up by 6.5% YoY in December. The core reading is seen up by 5.7%, easing from the previous 6%.

BTC Trading Plan: Wait for the fireworks on Thursday and plan for $19,000