Anna 
The U.S. dollar (USD) stood its ground against major counterparts in early Friday trade, supported by a negative turn in risk sentiment. Private lending data for December is anticipated during the European session, followed by the release of the December personal consumption expenditures (PCE) price index, personal spending, and personal income data by the U.S. Bureau of Economic Analysis (BEA).
Preview of U.S. Core PCE Inflation Rate: The Fed’s favored price index is expected to register a decline in December.
On Thursday, the European Central Bank (ECB) announced its decision to maintain the key interest rate during its January policy meeting, in line with expectations. ECB President Christine Lagarde, during a subsequent press conference, refrained from commenting on the timing of a potential policy shift and emphasized that it was premature to discuss interest rate cuts. The EUR/USD pair closed in negative territory on Thursday and extended losses on Friday, trading below 1.0850 at the time of reporting.
The U.S. Bureau of Economic Analysis (BEA) reported a robust 3.3% annual growth rate in gross domestic product (GDP) for the fourth quarter, surpassing market expectations of 2%. Other U.S. data revealed an increase in initial jobless claims to 214,000 from the previous week’s 189,000, while durable goods orders remained unchanged in December. The 10-year U.S. Treasury yield held above 4%, supporting the U.S. dollar index above 103.50. U.S. stock futures reflected a risk-off sentiment, declining by 0.4% to 0.8% in early European trade.
GBP/USD experienced a slight dip on Thursday and continued in early trade on Friday, maintaining relative stability around 1.2700.
Japanese data indicated a 1.6% year-on-year rise in the Tokyo Consumer Price Index (CPI) for January, a decrease from December’s 2.4%. The Bank of Japan, in its policy meeting minutes, emphasized the need to patiently maintain loose policies. USD/JPY saw an increase early on Friday, trading just below 148.00.
Gold recorded a modest gain on Friday, benefitting from a retreat in U.S. bond yields. Gold/USD struggled for direction in early European trade, hovering around $2,020.
