Here’s what you need to know on Tuesday, January 6:
After reaching its highest level in about a month above 98.80, the pair reached its highest level in about a month above 98.80. US Dollar Index (USD). It turned south during the US session on Monday and closed the day in negative territory. The index continues to decline early Tuesday as markets remain positive on risk. The European economic calendar will contain December inflation data from Germany.
US dollar price this week
The table below shows the percentage change in the US Dollar (USD) against the major currencies listed this week. The US dollar was weakest against the Australian dollar.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | -0.11% | -0.66% | -0.33% | 0.09% | -0.84% | -0.77% | -0.15% | |
| euro | 0.11% | -0.56% | -0.15% | 0.20% | -0.73% | -0.67% | -0.04% | |
| GBP | 0.66% | 0.56% | 0.32% | 0.77% | -0.18% | -0.11% | 0.52% | |
| JPY | 0.33% | 0.15% | -0.32% | 0.42% | -0.53% | -0.46% | 0.22% | |
| Canadian | -0.09% | -0.20% | -0.77% | -0.42% | -0.79% | -0.87% | -0.24% | |
| Australian dollar | 0.84% | 0.73% | 0.18% | 0.53% | 0.79% | 0.07% | 0.70% | |
| New Zealand dollar | 0.77% | 0.67% | 0.11% | 0.46% | 0.87% | -0.07% | 0.63% | |
| Swiss franc | 0.15% | 0.04% | -0.52% | -0.22% | 0.24% | -0.70% | -0.63% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select USD from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Although US military action against Venezuela prompted markets to adopt a cautious stance at the beginning of the week, a bullish open on Wall Street attracted risk flows. The Dow Jones Industrial Average rose more than 1% on the day, while the Nasdaq Composite Index rose about 0.8%. Meanwhile, disappointing data from the US put additional weight on the US dollar’s shoulders. The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) fell to 47.9 in December from 48.2 in November, showing that the contraction in manufacturing sector business activity continued at an accelerating pace. In European morning on Tuesday, the US Dollar Index fell towards 98.00 and lost about 0.2% on the day, while US stock index futures gained between 0.1% and 0.4%.
gold Ignore the upbeat market mood and take advantage of renewed US dollar weakness on Monday to rise 2.7% on a daily basis. The XAU/USD pair continues to rise and trades near $4,470 on Tuesday.
After the downward correction in the last week of 2025, silver It gained upward momentum and rose more than 5% on Monday. XAG/USD continues to rally early Tuesday and is trading near $78.90, up nearly 3% on the day.
After falling towards the 1.1650 level. EUR/USD It reversed direction in the US session on Monday and ended the day virtually unchanged. The pair maintains the recovery momentum and trades in positive territory near 1.1750 in the European session on Tuesday.
GBP/USD It made a sharp turnaround after falling towards 1.3400 on Monday and rose about 0.6% on the day. The pair continues to rise and is trading at its strongest level since mid-September above 1.3560 in the European morning.
Australian Dollar/US Dollar The pair is gaining momentum on Tuesday and is trading at its highest level since October 2024 above 0.6730. In the early trading hours of the Asian session on Wednesday, the Australian Bureau of Statistics will publish Consumer Price Index (CPI) data for November.
USD/JPY It is trading in a narrow channel below the 156.50 level after recording marginal losses on Monday.
Frequently asked questions about inflation
Inflation measures the rise in the prices of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a monthly (MoM) and yearly (YoY) basis. Core inflation excludes more volatile items such as food and fuel, which can fluctuate due to geopolitical and seasonal factors. Core inflation is the number that economists focus on and is the level targeted by central banks, which are tasked with keeping inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a monthly (MoM) and yearly (YoY) basis. The core CPI is the number targeted by central banks because it excludes volatile food and fuel inputs. When the core CPI rises above 2%, it typically causes interest rates to rise and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually leads to a stronger currency. The opposite is true when inflation falls.
Although it may seem counterintuitive, high inflation in a country causes the value of its currency to rise and vice versa for lower inflation. This is because the central bank will typically raise interest rates to combat rising inflation, which attracts more global capital flows from investors looking for a profitable place to park their money.
Previously, gold was the asset investors turned to during times of high inflation because it maintained its value, and while investors will often continue to buy gold for its safe holdings in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will raise interest rates to combat it. High interest rates are negative for gold because they increase the opportunity cost of holding gold versus interest-bearing assets or putting money in a cash deposit account. On the flip side, lower inflation tends to be positive for gold because it lowers interest rates, making the shiny metal a more viable investment alternative.
