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After the market widely expected the Federal Reserve to decide to keep interest rates unchanged, Federal Reserve Chairman Powell’s hawkish tendency at the press conference further strengthened the US dollar, causing the US dollar index (DXY) to fade away from its initial pessimism and regain upward momentum. Looking ahead, the U.S. initial jobless claims and the ISM Manufacturing Purchasing Managers Index (PMI) released on February 1 will be in focus.
EUR/USD challenged year-to-date lows in the sub-1.0800 area following the Fed meeting, while extending a multi-session consolidation trend. In terms of the euro, Thursday will release the final value of the Eurozone Manufacturing Purchasing Managers Index, the initial value of the inflation rate and a speech by European Central Bank President Lagarde.
This will be a big day for GBP as the Bank of England is set to meet and is largely expected to keep monetary policy on hold on February 1st. Other data will show final manufacturing PMI readings for January. Meanwhile, GBP/USD remains stuck in its year-to-date range between 1.2600-1.2800.
Falling U.S. Treasury yields prompted USD/JPY to edge lower, briefly hovering at the 146.00 support level. The only noteworthy data release from Japan on Thursday was weekly foreign bond investment.
The most likely near-term trend for AUD/USD remains further range-bound trading. On Thursday, Australia will release building consent data for December.
Crude oil prices fell sharply on a larger-than-expected weekly build in U.S. inventories, while worries in China also contributed to the decline.
Gold prices rose to two-week highs near $2,050 an ounce but ended the day near $2,030.
