ForexLive European FX news wrap: Dollar keeps slightly lower, eyes on Trump again

Headlines:

• Weekly update on interest rate expectations
• ECB’s Vujčić: Market expectation for three more rate cuts this year is not unreasonable
• BOE’s Pill: I do expect we can cut rates further
• PBOC says will implement appropriately loose monetary policy
• UK Q4 preliminary GDP +0.1% vs -0.1% q/q expected
• UK December monthly GDP +0.4% vs +0.1% m/m expected
• Eurozone December industrial production -1.1% vs -0.6% m/m expected
• Germany January final CPI +2.3% vs +2.3% y/y prelim
• Switzerland January CPI +0.4% vs +0.4% y/y expected

Markets:

• CHF leads, AUD lags on the day
• European equities higher; S&P 500 futures flat
• US 10-year yields down 4 bps to 4.593%
• Gold up 0.5% to $2,917.99
• WTI crude down 1.1% to $70.49
• Bitcoin down 1.9% to $95,841

It’s another session where European traders are left waiting on key headlines from the US session again later.

Trump continues to be a key influence in markets and we’re awaiting more headlines on reciprocal tariffs and any further developments on his mediation of the Russia-Ukraine conflict.

The dollar continued its post-CPI slump in Asia and in part during European trading as well today. The greenback reversed gains after the report yesterday and the mood music is continuing.

EUR/USD touched a high of 1.0440 but is now just up 0.1% at around 1.0393 on the day. GBP/USD also raced up to a high of 1.2519 after a stronger UK Q4 GDP report before settling up by 0.1% to 1.2460 now.

Instead, it was USD/JPY that proved to be a decent mover in the session as Treasury yields slipped further from the highs yesterday. The pair is down 0.4% to 153.80 levels now, down from around 154.40 earlier as 10-year yields in the US dip back under 4.60%.

Meanwhile, the franc was also a mover on the session with EUR/CHF falling 0.5% to 0.9435 amid a rejection of its 200-day moving average again.

US futures also lost some early gains and that looks to be weighing on the antipodeans ahead of the North America session. As for European indices, they’re unfazed and eyeing a seventh straight week of gains to start the year. Hot. 🔥

All eyes are on the US again where we’ll have PPI data and the weekly jobless claims to watch out for. But it is likely that Trump headlines will steal the show once again, as it has been since he took to the White House last month.

This article was written by Justin Low at www.forexlive.com.