Here is what you need to know on Friday, January 16:
The US Dollar (USD) erases part of its earlier gains to near 99.30 heading into the European trading session, after drawing support from better-than-expected US Jobless Claims data. Traders await the release of the US Industrial Production report for December later on Friday, along with the speech from Federal Reserve (Fed) Governor Michelle Bowman.
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.04% | -0.05% | -0.14% | -0.04% | -0.06% | -0.32% | -0.13% | |
| EUR | 0.04% | -0.01% | -0.13% | 0.00% | -0.03% | -0.27% | -0.09% | |
| GBP | 0.05% | 0.01% | -0.08% | 0.03% | -0.01% | -0.26% | -0.07% | |
| JPY | 0.14% | 0.13% | 0.08% | 0.13% | 0.09% | -0.16% | 0.03% | |
| CAD | 0.04% | -0.01% | -0.03% | -0.13% | -0.05% | -0.30% | -0.09% | |
| AUD | 0.06% | 0.03% | 0.01% | -0.09% | 0.05% | -0.25% | -0.07% | |
| NZD | 0.32% | 0.27% | 0.26% | 0.16% | 0.30% | 0.25% | 0.19% | |
| CHF | 0.13% | 0.09% | 0.07% | -0.03% | 0.09% | 0.07% | -0.19% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick 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 USD (base)/JPY (quote).
A slew of US economic data this week came in stronger than estimates, lowering the implied probabilities of imminent Federal Reserve (Fed) rate cuts. Fed funds futures have pushed back expectations for the next rate cut to June and September from January and April.
Meanwhile, US President Donald Trump said on Thursday that he had been told that killings in Iran’s crackdown on protests appeared to be easing and saw no immediate plan for large-scale executions. Trump hasn’t taken any options off the table, saying that there will be “grave consequences” if killings continue.
AUD/USD strengthens above 0.6700 in Friday’s early European session. Cautious sentiment surrounding the Reserve Bank of Australia’s (RBA) policy outlook supports the Australian Dollar.
USD/JPY attracts some sellers below 158.50 amid intervention fears. Japan’s Finance Minister Satsuki Katayama on Friday reiterated her warning that all options, including direct currency intervention, are available for dealing with the recent weakness in the Japanese Yen.
EUR/USD holds positive ground above 1.1600. The European Central Bank (ECB) has kept rates on hold since ending a rate cut cycle in June and signaled last month that it was in no hurry to change policy again.
GBP/USD gains momentum to around 1.3385, bolstered by the upbeat UK Gross Domestic Product (GDP) report. The UK economy grew 0.3% MoM in November, following a 0.1% drop reported in October, the Office for National Statistics (ONS) showed on Thursday. This figure came in stronger than the expectation of a 0.1% increase.
Gold retreats from a record high to near $4,610 as Trump softens his stance on Iran, reducing bullion’s safe-haven demand. Silver slumps below $91.50 after Trump decided not to impose tariffs on imports of what are now deemed to be “critical minerals”.
WTI holds steady on the day, as easing tensions in Iran offset ongoing geopolitical conflicts between Russia and Ukraine. Reuters reported on Friday that Ukraine has ramped up attacks on Russian tankers, with at least six tankers targeted by drones and missiles in the Baltic Sea.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
