Important calendar events
The dollar strengthened last week, gaining strength on Trump’s tariff threats. The dollar index rose from 107.5 to 108.5. However, US treasury yields edged lower on economic concerns, dropping from 4.63% to 4.54% for the 10-year bond yield.
The US Federal Reserve held interest rates steady at its January meeting, which was concluded on Wednesday, after delivering three consecutive rate cuts in 2024. FOMC policymakers voted unanimously to maintain the federal funds range to a target range of 4.25% to 4.50%, which was in line with expectations.
The Fed’s latest monetary policy statement did not include an earlier mention that US inflation is moving towards the central bank’s 2% target. Instead, the report stated that price pressures remain elevated, which points to a prolonged pause in rate cuts. The Fed’s statement highlighted that the US labor market remains robust and that the economy is expanding satisfactorily.
Fed Chair Jerome Powell delivered a mildly hawkish message after the policy meeting, boosting the dollar. Powell stated that the Fed’s approach will remain data-driven and stressed that the central bank needs to consider potential policy changes under Trump’s administration. Market odds of another rate cut before summer dropped after Powell’s speech, with markets pricing in a rate cut in June at the earliest.
In addition, US President Donald Trump is imposing steep trade tariffs on other countries, which can potentially raise price pressures in the US. Concerns that US inflation will rise again are raising the likelihood that interest rates will remain at restrictive levels for longer, lowering expectations of future rate cuts.
Trump has been using threats of imposing trade tariffs as a negotiation tool to further his agenda with other countries. Last week, Trump threatened Colombia with 50% tariffs on their imports after the country refused to take in deported immigrants from the US. On Monday, however, the Colombian government backed down on accepting deportees from the US, and trade tariffs against the country have been put on hold.
On Tuesday, newly appointed US Treasury Secretary Scott Bessent proposed tariffs on all US imports, which would start at 2.5% and could be gradually increased. Trump, however, stated that he wants more aggressive tariffs, saying that he will apply tariffs to chips, pharmaceuticals, steel,l and copper.
Trump has already announced a plan to impose 25% tariffs on imports from Canada and Mexico starting February 1 and has stated that his administration is considering universal tariffs on all imports to the US. On Saturday, Trump announced that he would impose 25% tariffs on Canadian and Mexican goods, except Canadian energy exports, which will be subject to a 10% tariff. In addition, the US government will impose a 10% duty on imports from China to the US.
Trump posted tariff threats on his social media on Thursday and again on Friday, causing market turmoil. Trump’s comments triggered a risk aversion sentiment and demand for safe-haven assets rose, boosting the dollar. Trump has threatened to impose tariffs on the EU although he did not mention any specifics. In addition, Trump has threatened BRICS countries with massive tariffs reaching 100% if they try to replace the dollar with any other currency or if they create a new currency for international trade.
On the data front, the US Core PCE Price Index rose 0.2% in December after rising only 0.1% in November. On an annual basis, Core PCE Price Index rose to 2.6% in December from 2.4% in November indicating that price pressures in the US remain elevated.
Advance GDP data for the fourth quarter of 2024 showed that the US economy expanded by 2.3%, following a 3.1% expansion in the third quarter of 2024 and falling below market estimates of 2.7% growth. In addition, the US economy expanded by 3.0% in the second quarter of the year and by 1.4% in the first quarter of the year.
GDP Price Index data on Thursday fell below expectations, indicating that price pressures in the US are not as high as initially expected. GDP Price Index rose to 2.2% in Q4 of 2024 from 1.9% previously, falling short of expectations of 2.7% growth. Initial Jobless Claims released on Thursday rose to 207K for the week ending January 25, missing estimates of 224K and falling below the previous week's print of 223K.
US Durable Goods Orders released on Tuesday were disappointing, putting pressure on the dollar. Durable Goods Orders contracted 2.2% in December, following a 1.2% decrease reported in November, disappointing market expectations of 0.3% growth. Core Durable Goods Orders, which exclude transportation items, rose by 0.3% in December after dropping by 0.2% in November and against expectations of 0.4% growth. In addition, CB Consumer Confidence Index dropped to 104.1 in January from 109.5 in December against market expectations of 105.7 according to data released on Tuesday. On the other hand, The Richmond Manufacturing Index improved to -4 in January from -10 in December, beating expectations of a -8 reading.
Disinflation in the US is progressing, which may affect the Fed’s rate outlook. Headline inflation rose by 2.9% year-on-year in December from 2.7% in November, which was in line with expectations. Monthly inflation rose by 0.4% in December against 0.3% in November, as expected. Core CPI, however, which excludes food and energy, rose by just 0.2% in December following a 0.3% rise in November and against expectations of a 0.3% print. Core CPI rose 3.2% year-on-year in December, below estimates for a 3.3% increase and November’s 3.3% gain.
EUR/USD moved in a downtrend last week, dipping from 1.053 to 1.036. If the EUR/USD pair declines, it may find support at 1.017, while resistance may be encountered near 1.053.
The ECB lowered its benchmark interest rate by 25 basis points on Thursday, bringing its main refinancing rate down to 2.90% from 3.15%. The central bank is currently expected to cut interest rates up to four more times in 2025, to a total of 125bps, until neutral policy settings are reached. Expectations that the ECB will return to a more normalized policy setting sooner than the Fed are putting pressure on the EUR/USD rate.
In her speech after the policy meeting, ECB President Christine Lagarde stressed that EU policymakers will not commit to a predefined rate cut path and that the central bank’s policy will remain data-driven.
Lagarde also commented on the Eurozone GDP data released earlier on Thursday that showed that the EU economy is stagnant, stating that the ECB expects the economy to remain weak for some time. She also hinted that the trade tariffs that the US might impose may hinder economic growth and warned that increased friction in global trade could weigh on the Eurozone’s economy. Lagarde, however, denied that there is a danger of stagflation, the toxic economic mix of stagnating economy and high inflation. Lagarde admitted that inflation in the Eurozone is expected to hover around the current levels in the short term but appeared confident that inflation will come down to the central bank’s 2% target within the year.
US President Donald Trump posted tariff threats on his social media on Thursday and again on Friday, causing market turmoil. Trump’s comments triggered a risk aversion sentiment and demand for safe-haven assets rose, boosting the dollar. Trump threatened on Friday to impose trade tariffs on the EU although he did not mention any specifics.
On the data front, German regional inflation came in lower than expected on Friday. German CPI contracted by 0.2% in January against the expectation of a rise of 0.1%. December’s print, however, was revised upward to reflect a 0.5% rise in inflation.
German Preliminary GDP data released on Thursday showed that the Eurozone’s leading economy is entering a recession. The German economy contracted by 0.2% in the fourth quarter of 2024, following a 0.1% expansion in the third quarter, against expectations of a 0.1% decline.
Preliminary Flash GDP data released on Thursday showed that the Eurozone economy remained stagnant in the final quarter of 2024 after expanding by 0.3% in the second quarter. Preliminary Flash GDP data disappointed expectations of 0.1% growth in Q4 of 2024, raising concerns about stagflation in the EU. The economic outlook of the EU remains fragile as prolonged tightening has brought the Euro area economy to the brink of recession.
German IFO Business Climate data on Monday showed that German business sentiment is improving. The German IFO Business Climate index rose to 85.1 in January from 84.7 in December, against expectations of an 84.9 print.
Eurozone inflation remains above the ECB’s 2% target and may prevent the ECB from cutting interest rates further. Eurozone inflation rose to 2.4% year-on-year in December from 2.2% in November. Every month, Eurozone inflation rose 0.4% in December after dropping 0.3% in November. Core CPI, which excludes food and energy, remained steady at 2.7% in December.
GBP/USD traded sideways last week, oscillating around the 1.245 level as safe-haven demand boosted both the Sterling and the dollar. If the GBP/USD rate goes up, it may encounter resistance at 1.252, while support may be found near 1.209.
The BOE kept interest rates steady at its latest policy meeting, having cut interest rates twice already this year. MPC members voted 6-3 to keep rates on hold, with three members in favor of cutting interest rates.
Bank of England Governor Andrew Bailey has stated that the central bank needs to adopt a gradual approach to future rate cuts. Bailey has also stressed that the BOE’s policy outlook will remain data-driven and refused to commit to a timeline or magnitude of future rate cuts.
This coming week markets will focus on the BOE monetary policy decision on Thursday. The BOE will likely resume its easing cycle this week and reduce interest rates by 25 basis points from 4.75% to 4.5%.
In an interview on Bloomberg on Tuesday, British Prime Minister Keir Starmer stated that he anticipates a turnaround in the UK’s economy. Starmer also appeared optimistic about the UK’s trade relationship with the US. The UK seems to be at an advantage at a time when most other nations are concerned about the imposition of trade tariffs by Trump’s administration. Starmer stressed that the UK’s trading relationship with the US is excellent and that he expects this relationship to improve further in the future.
Chancellor of the Exchequer Rachel Reeves reiterated Starmer's message in a speech in Oxfordshire on Wednesday. Reeves stated that the British economy is on the brink of a turnaround, echoing Starmer’s previous message and boosting the Sterling.
The British economy expanded by just 0.1% in November, disappointing expectations of 0.2% growth and following contraction by 0.1% in October. Final GDP data for the third quarter of the year have previously shown that the British economy is stagnating. Earlier forecasts indicated slight economic growth by 0.1% in the third quarter of 2024, but the British economy is being stifled by high interest rates and cannot expand.
Price pressures in the UK are easing, raising the odds of a BOE rate cut in February and providing support for the Sterling. Headline inflation in the UK rose to 2.5% year-on-year in December, dropping from 2.6% in November, against expectations of a 2.6% print. Core inflation, which excludes food and energy, also came in lower than expected, rising by 3.2% annually in December, against a 3.5% reading in November and 3.4% anticipated.
The Yen gained strength last week and USD/JPY dropped from 155.7 to 155.1. If the USD/JPY pair declines, it may find support at 153.1. If the pair climbs, it may find resistance at 158.9.
The BOJ raised interest rates by 25 basis points after the conclusion of its monetary policy meeting in January. The BOJ raised its interest rate from 0.25% to 0.50%, its highest level since 2008. In addition, the BOJ adjusted its inflation projections upward, to reflect the depreciation of the yen and rising oil prices, hinting at more rate hikes down the road. Policymakers expect Japan’s inflation to rise to 2.4% in 2025, up from previous estimates of 1.9%, and above the central bank’s 2% target.
BOJ Governor Kazuo Ueda hinted that the central bank will continue to raise interest rates if Japan’s economy continues to improve and the BOJ 2% inflation target is reached. Ueda emphasized, however, that the timeline of future rate hikes will depend on economic and inflationary conditions. Markets currently anticipate that the BOJ will raise interest rates to a peak interest of 1.00% over the next two years.
In a speech to Japan’s Parliament on Friday, however, Ueda appeared to go back on his previous hawkish stance. Ueda stated on Friday that the underlying inflation in Japan is still somewhat below 2% and hinted that the central bank should maintain an accommodative policy to support price trends. Market odds of future BOJ rate hikes dropped slightly after Ueda’s comments on Friday.
BOJ Deputy Governor Ryozo Himino stated on Thursday, however, that the central bank will continue to raise rates if the economic growth and inflationary pressures in Japan fall within the BOJ’s estimates.
Inflation in Japan is on the rise, raising the odds of future rate hikes and providing support for the Yen. The headline Tokyo CPI inflation rose to 3.4% annually in January from 3.0% in December. Headline inflation in Japan rose by 3.0% year-on-year in December from 2.7% in November, which was in line with expectations. In addition, BOJ Core CPI rose to 1.7% year-on-year in November from 1.5% in October against expectations of 1.5%.
Final GDP data for the third quarter of the year showed that Japan’s economy expanded by 0.3%, exceeding initial estimates of 0.2%, but down from 0.7% in the second quarter. The Japanese economy is expanding, after shrinking by 0.5% in the first quarter of the year.
Gold prices surged from $2,760 to $2,817 per ounce last week, registering a new all-time high. If gold prices rise, they may encounter resistance at $2,900 per ounce, while if gold prices decline, support may be encountered near $2,600 per ounce.
Gold prices gained strength last week, reaching a new all-time high of $2,817 per ounce, boosted by uncertainty over Donald Trump’s proposed tariffs. Uncertainty over Trump’s future policies and trade tariffs promotes a risk aversion sentiment, raising the appeal of safe-haven assets, such as gold.
Gold prices have been typically directed by the dollar’s movement, as the competing gold loses appeal as an investment when the dollar rises. The dollar gained strength on Thursday and the dollar index rose from 107.9 to 108.2. US treasury yields edged lower, with the US 10-year bond yield dropping from 4.54% to 4.52%.
Gold prices are under pressure by decreased Fed rate cut expectations. The US Federal Reserve held interest rates steady at its January meeting, which was concluded on Wednesday, after delivering three consecutive rate cuts in 2024. FOMC policymakers voted unanimously to maintain the federal funds range to a target range of 4.25% to 4.50%, which was in line with expectations.
The Fed’s latest monetary policy statement did not include an earlier mention that US inflation is moving towards the central bank’s 2% target. Instead, the report stated that price pressures remain elevated, which points to a prolonged pause in rate cuts. The Fed’s statement highlighted that the US labor market remains robust and that the economy is expanding at a satisfactory pace.
Fed Chair Jerome Powell delivered a mildly hawkish message after the policy meeting, putting pressure on gold prices. Powell stated that the Fed’s approach will remain data-driven and stressed that the central bank needs to consider potential policy changes under Trump’s administration. Market odds of another rate cut before summer dropped after Powell’s speech, with markets pricing in a rate cut in June at the earliest.
Gold prices are gaining strength on market concerns over US President Donald Trump’s future policies and trade tariffs. Trump has been using threats of imposing trade tariffs as a negotiation tool to further his agenda with other countries.
On Tuesday, newly appointed US Treasury Secretary Scott Bessent proposed tariffs on all US imports, which would start at 2.5% and could be gradually increased. Trump, however, stated that he wants more aggressive tariffs, saying that he will apply tariffs to chips, pharmaceuticals, steel, and copper.
Trump posted tariff threats on his social media on Thursday and again on Friday, causing market turmoil. Trump has threatened BRICS countries with massive tariffs reaching 100% if they try to replace the dollar with any other currency or if they create a new currency for international trade.
On Saturday, Trump announced that he would impose 25% tariffs on Canadian and Mexican goods, except Canadian energy exports, which will be subject to a 10% tariff. In addition, the US government will impose a 10% duty on imports from China to the US. Trump’s tariff threats have triggered a risk aversion sentiment and demand for safe-haven assets is rising, boosting gold prices.
Oil prices dipped last week and WTI price tested the $73.0 per barrel level support before paring some losses and ending the week at 74.8 per barrel. If oil prices retreat, they may encounter support near $73.0 per barrel, while resistance may be found near $81.0 per barrel.
Oil prices dipped on Wednesday after the release of better-than-expected US crude oil stockpiles. US crude oil inventories released on Wednesday showed that US crude stockpiles exceeded expectations, putting a lid on oil prices. The US Energy Information Administration (EIA) reported a weekly crude stockpile build of 3.5M barrels for the week to January 24, exceeding expectations of 2.2M barrel growth and following a drop of 1.0M barrels the week before.
Oil prices are under pressure by concerns over US President Donald Trump’s energy agenda. Trump has vowed to declare a national energy emergency and start drilling for oil immediately to build up US strategic reserves.
Speaking at the World Economic Forum in Davos, in January, Trump urged OPEC members to lower oil prices. Trump said that he would ask Saudi Arabia and other OPEC countries to bring down the cost of oil.
Trump has already issued a series of executive orders imposing tariffs on trading countries. On Saturday, Trump announced that he would impose 25% tariffs on Canadian and Mexican goods, except Canadian energy exports, which will be subject to a 10% tariff. Canada’s primary export is crude oil, which is chiefly bought by the US.
Trump posted tariff threats on his social media on Thursday and again on Friday, causing market turmoil. Trump has threatened BRICS countries with massive tariffs reaching 100% if they try to replace the dollar with any other currency or if they create a new currency for international trade.
Increasing Western sanctions against Russia and Iran have been paying off, limiting the oil output of these countries. Former US President Joe Biden has imposed strict sanctions on Russian oil exports. Incoming US President Donald Trump, however, may ease restrictions on Russia’s oil exports in exchange for an agreement to end the war in Ukraine. Trump, on the other hand, is also expected to reinforce restrictions on Iran's oil exports.
OPEC+ has announced that it will extend its voluntary production cuts until the end of the first quarter of 2025, however. Oil prices have been under pressure and the cartel is limiting production in an attempt to raise oil prices.
Oil prices are kept in check by high central banks’ interest rates. The US Federal Reserve held interest rates steady at its January meeting, which was concluded on Wednesday, after delivering three consecutive rate cuts in 2024. FOMC policymakers voted unanimously to maintain the federal funds range to a target range of 4.25% to 4.50%, which was in line with expectations.
The Fed’s latest monetary policy statement did not include an earlier mention that US inflation is moving towards the central bank’s 2% target. Instead, the report stated that price pressures remain elevated, which points to a prolonged pause in rate cuts. The Fed’s statement highlighted that the US labor market remains robust and that the economy is expanding at a satisfactory pace.
Fed Chair Jerome Powell delivered a mildly hawkish message after the policy meeting, putting pressure on oil prices. Powell stated that the Fed’s approach will remain data-driven and stressed that the central bank needs to consider potential policy changes under Trump’s administration. Market odds of another rate cut before summer dropped after Powell’s speech, with markets pricing in a rate cut in June at the earliest.
Bitcoin price was volatile last week, rising above $106,000 mid-week and then dropping below $97,000 over the weekend. If BTC price declines, support can be found at $90,000, while resistance may be encountered at $106,970.
Ethereum price also exhibited high volatility last week, rising above $3,400 mid-week, then plummeting to $2,800 over the weekend. If Ethereum's price declines, it may encounter support near $2,700, while if it increases, resistance may be encountered near $3,520.
Bitcoin price registered a new all-time high of $109,880 early last week but dipped later and has been under pressure by increased risk aversion sentiment.
Stock markets plummeted last week over the emergence of a new Chinese AI technology. Reports of the launch of a low-cost AI technology caused tech stocks to plummet, sending shock waves to crypto markets. DeepSeek, a Chinese tech startup, caused a stir in markets by releasing a low-cost AI tool that seems on par with the most sophisticated AI tools developed by US companies. Stock markets crashed on Monday, giving rise to a risk-aversion sentiment that drove crypto markets down.
Trump’s proposed plans for building a Bitcoin strategic reserve have been boosting Bitcoin price. Donald Trump has openly declared his support of crypto markets, announcing that he will make the US ‘the crypto capital of the planet’. Growing expectations that the new government will adopt a pro-crypto regulatory and fiscal policy are boosting crypto markets and Bitcoin price registered a new all-time high of $109,880 in January.
On the other hand, uncertainty over Trump’s future policies and trade tariffs is generating a risk aversion sentiment, which puts pressure on crypto markets. Trump has been using threats of imposing trade tariffs as a negotiation tool to further his agenda with other countries.
On Tuesday, newly appointed US Treasury Secretary Scott Bessent proposed tariffs on all US imports, which would start at 2.5% and could be gradually increased. Trump, however, stated that he wants more aggressive tariffs, saying that he will apply tariffs to chips, pharmaceuticals, steel, and copper.
Trump posted tariff threats on his social media on Thursday and again on Friday, causing market turmoil. Trump has threatened BRICS countries with massive tariffs reaching 100% if they try to replace the dollar with any other currency or if they create a new currency for international trade.
On Saturday, Trump announced that he would impose 25% tariffs on Canadian and Mexican goods, except Canadian energy exports, which will be subject to a 10% tariff. In addition, the US government will impose a 10% duty on imports from China to the US. Trump’s comments triggered a risk aversion sentiment putting pressure on cryptocurrencies.
Cryptocurrency prices are also affected by central banks’ interest rates. The US Federal Reserve held interest rates steady at its January meeting, which was concluded on Wednesday, after delivering three consecutive rate cuts in 2024. FOMC policymakers voted unanimously to maintain the federal funds range to a target range of 4.25% to 4.50%, which was in line with expectations.
The Fed’s latest monetary policy statement did not include an earlier mention that US inflation is moving towards the central bank’s 2% target. Instead, the report stated that price pressures remain elevated, which points to a prolonged pause in rate cuts. The Fed’s statement highlighted that the US labor market remains robust and that the economy is expanding at a satisfactory pace.
Fed Chair Jerome Powell delivered a mildly hawkish message after the policy meeting. Powell stated that the Fed’s approach will remain data-driven and stressed that the central bank needs to consider potential policy changes under Trump’s administration. Market odds of another rate cut before summer dropped after Powell’s speech, with markets pricing in a rate cut in June at the earliest.
Even though high interest rates put pressure on crypto markets, the Fed’s cautious stance boosted risk assets this week. Powell’s speech made it clear that the Fed intends to proceed slowly with future rate cuts, creating a stable economic environment that raises risk sentiment.
BTC/USD 1h Chart
ETH/USD 1h Chart
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Written by:
Myrsini Giannouli
présence dans l'industrie en tant que fournisseur de liquidités
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