Here’s what you need to know on Thursday, January 15:
The US dollar rose against its major counterparts on Thursday, supported by strong US retail sales data for November. Traders will benefit from further signals from the US weekly initial jobless claims report, which will be released later on Thursday. Fed officials, including Raphael Bostic, Michael Barr, Thomas Barkin and Jeff Schmid, are also scheduled to speak.
US dollar price today
The table below shows the percentage change in the US Dollar (USD) against the major currencies listed today. The US dollar was the strongest against the New Zealand dollar.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | 0.08% | 0.02% | -0.02% | 0.11% | 0.06% | 0.17% | 0.09% | |
| euro | -0.08% | -0.06% | -0.09% | 0.03% | -0.02% | 0.09% | 0.02% | |
| GBP | -0.02% | 0.06% | -0.04% | 0.09% | 0.04% | 0.14% | 0.07% | |
| JPY | 0.02% | 0.09% | 0.04% | 0.11% | 0.07% | 0.14% | 0.10% | |
| Canadian | -0.11% | -0.03% | -0.09% | -0.11% | -0.04% | 0.06% | -0.00% | |
| Australian dollar | -0.06% | 0.02% | -0.04% | -0.07% | 0.04% | 0.11% | 0.04% | |
| New Zealand dollar | -0.17% | -0.09% | -0.14% | -0.14% | -0.06% | -0.11% | -0.07% | |
| Swiss franc | -0.09% | -0.02% | -0.07% | -0.10% | 0.00% | -0.04% | 0.07% |
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 the US dollar from the left column and move along the horizontal line to the Japanese yen, the percentage change displayed in the box will represent the US dollar (base) / Japanese yen (quote).
US retail sales rose more than expected in November, while US producer prices rose slightly over the same period. These reports supported the US central bank’s argument for keeping interest rates steady in January. Markets still expect two rate cuts this year, but not before Powell’s term expires in May.
Meanwhile, Federal Reserve Chairman Jerome Powell criticized the decision of the administration of US President Donald Trump to summon him, saying that it amounted to intimidating the US central bank into offering lower interest rates. Trump said Wednesday that he has no plans to fire Powell despite the Justice Department’s criminal investigation into the Fed chief, but that it is “too early” to say what he will ultimately do.
Traders will be closely monitoring the latest geopolitical developments surrounding the Iranian civil unrest. Trump said early Thursday that Iran “has no plan to carry out executions,” amid concerns for the fate of a detained anti-government protester. However, the US President refused to take military action off the table, saying his administration would wait and see.
Australian Dollar/US Dollar Holds losses below 0.6700 after Australian Consumer Inflation Expectations data. The figure fell to 4.6% in January from 4.7% the previous month.
USD/JPY It attracts some sellers to near 158.40, but it is pinned near 18-month highs. Traders remain wary of intervention after strong pre-election warnings in Japan.
EUR/USD The maximum remains below 1.1650 as tensions in the Middle East keep the common currency within familiar levels. Traders are awaiting the Harmonized Consumer Price Index (HICP) data from Germany, which is scheduled for release on Friday.
GBP/USD The price stabilizes around 1.3430 as traders prefer to wait on the sidelines ahead of the November UK GDP report. The British economy is expected to grow by 0.1% month-on-month in November.
gold It is falling after hitting a new record high of $4,643 in the previous session, trading at around $4,600 an ounce in the early European session on Thursday. silver Gold is rebounding from an all-time high of $93.51 amid easing tensions in Iran, reducing the attractiveness of safe-haven demand.
West Texas Intermediate crude oil It fell to nearly $60.00 after Trump indicated he might not attack Iran. Furthermore, the Energy Information Administration (EIA) weekly report showed that crude oil inventories continue to rise.
Frequently asked questions about interest rates
Interest rates are charged by financial institutions on loans made to borrowers and are paid as interest to savers and depositors. They are affected by base lending rates, which are set by central banks in response to changes in the economy. Central banks typically have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below the target, the central bank may lower key lending rates, with the aim of stimulating lending and boosting the economy. If inflation rises significantly above 2%, this usually results in the central bank raising key lending rates in an attempt to reduce inflation.
Higher interest rates generally help strengthen a country’s currency because they make it a more attractive place for global investors to put their money.
High interest rates generally affect the price of gold because they increase the opportunity cost of holding gold rather than investing in interest-bearing assets or putting cash in the bank. If interest rates are high this usually causes the price of the US dollar (USD) to rise, and since gold is priced in dollars, this has the effect of lowering the price of gold.
The federal funds rate is the overnight interest rate at which U.S. banks lend to each other. It is the key rate that is frequently set by the Federal Reserve at FOMC meetings. It is set as a range, for example 4.75%-5.00%, although the upper limit (in this case 5.00%) is the quoted figure. Market expectations of the future federal funds rate are tracked by the CME FedWatch tool, which maps how many financial markets will behave in anticipation of the Federal Reserve’s future monetary policy decisions.
