Current forecasts suggest that the harmonized index in the eurozone’s largest economy will show growth of 0.2% month-on-month and 2.0% year-on-year, while the corresponding Italian indicator is expected at 0.2% and 1.2%, respectively. Stable inflation dynamics remain one of the euro’s key advantages over the US dollar, as they allow the European Central Bank (ECB) to refrain from considering further monetary easing—especially after recent GDP data confirmed Germany’s economic recovery. For the first time in three years, the economy expanded by 0.2%, driven by higher consumer spending and government investment, with private consumption rising by 1.4% and public spending by 1.5% in inflation-adjusted terms.
However, experts viewed the report cautiously, believing signs of stagnation may soon emerge as the manufacturing sector continues to face pressure from elevated US trade tariffs. Skeptics also note that much of Germany’s growth is linked to increased defense spending, while the real economy and consumer demand remain insufficiently recovered. At the same time, fiscal pressure is rising not only in Germany but also in France, where the government is seeking to reduce a multibillion-euro budget deficit.
Additional support for the single currency came from industrial production data: year-on-year growth accelerated from 1.7% to 2.5%, exceeding market expectations of 2.0%, while the monthly figure held at 0.7%, contrary to forecasts of 0.5%.
Nevertheless, trade balance data disappointed investors, as the seasonally adjusted surplus narrowed from €17.9 billion to €9.9 billion. Meanwhile, US data supported the dollar, clearly signaling a wait-and-see stance by the Federal Reserve on monetary policy adjustments. Initial jobless claims rose to 198.0 thousand, below both the forecast of 215.0 thousand and the previous reading of 207.0 thousand. The four-week average fell from 211.5 thousand to 205.0 thousand, while the total number of people receiving government assistance declined from 1.903 million to 1.884 million, compared with expectations of 1.890 million.
GBP/USD
The pound is gaining ground, correcting after the bearish impulse formed in the previous session and testing the 1.3390 level for an upside breakout amid a lack of fresh market drivers. Meanwhile, UK investors will focus on GDP estimates from the National Institute of Economic and Social Research (NIESR) for December.
Earlier, experts expected the national economy to contract by 0.1% over the past three months, and weaker data would further strengthen expectations of additional interest rate adjustments by the Bank of England from the current 3.75%. At the same time, November GDP grew by 0.3% after a −0.1% correction previously, exceeding forecasts of just 0.1%, while the services PMI rose from 0.1% to 0.2% quarter-on-quarter, beating expectations of stagnation.
Market participants also paid close attention to the 2.3% rise in industrial production after a 0.4% change, despite expectations of a similar decline. On a monthly basis, production slowed slightly from 1.3% to 1.1%, still well above the projected 0.1%.
The US dollar continues to be supported by expectations that the Federal Reserve will maintain its current monetary policy at the January 29 meeting. Official projections indicate only one 25-basis-point rate cut in 2026, indirectly confirmed by strong labor market data. Initial jobless claims came in at 198.0 thousand, below both forecasts and the prior reading, while continuing claims fell from 1.903 million to 1.884 million.
AUD/USD
The Australian dollar is showing modest gains against the US dollar, extending the corrective impulse from the previous session that allowed prices to recover losses and reach the 0.6700 level. Recent macroeconomic data had a limited impact: Melbourne Institute inflation expectations for January declined by just 0.1% to 4.6%, which likely supports the Reserve Bank of Australia’s (RBA) stance on maintaining current monetary policy. Despite some easing in inflation to 3.4% year-on-year in November, authorities view the trend as consistent with the baseline scenario and emphasize the importance of quarterly data for assessing sustainability.
The regulator also remains focused on external risks, including geopolitical instability in the Asia-Pacific region and potential turbulence in high-tech and AI-related investment markets, which could undermine investor confidence. In addition, import tariffs and slowing growth in China—the country’s main trading partner—continue to weigh on Australia’s export activity. Still, recent Chinese data were broadly positive: exports rose from 5.9% to 6.6% year-on-year versus expectations of 3.0%, while imports increased from 1.9% to 5.7%, compared with forecasts of 0.9%. The trade surplus narrowed slightly from $111.68 billion to $114.1 billion, beating estimates of $113.6 billion.
Meanwhile, the US dollar remains supported by expectations that the Federal Reserve will keep policy unchanged at the January 29 meeting. Official forecasts point to only one 25-basis-point rate cut in 2026, whereas markets previously anticipated two or even three moves. Much will depend on incoming US macroeconomic data, particularly inflation figures.
USD/JPY
The US dollar is showing mixed dynamics, consolidating around the 158.30 level, supported by strong macroeconomic data that significantly reduce the likelihood of a near-term dovish shift by the Federal Reserve. In particular, the New York Fed manufacturing index surged from −3.7 to 7.7 points in January, far exceeding the consensus forecast of 1.0, while the Philadelphia Fed index jumped from −8.8 to 12.6 points versus expectations of −2.0.
Additional confirmation of economic resilience came from labor market data: initial jobless claims for the week ending January 9 declined from 207.0 thousand to 198.0 thousand, while continuing claims fell from 1.903 million to 1.884 million. This strengthens the position of hawks within the Federal Open Market Committee (FOMC) and supports arguments for keeping the key rate within the 3.50–3.75% range until clearer signs of economic slowdown and easing inflation pressures emerge, which currently remain stable.
Core consumer inflation, excluding food and energy, rose by 0.2% month-on-month and 2.6% year-on-year in December, missing expectations of 0.3% and 2.7%, while the headline index increased by 0.3% and 2.7%, fully matching forecasts. Meanwhile, the yen remains under pressure amid reports that Japanese Prime Minister Sanae Takaichi may call early parliamentary elections, as the ruling coalition needs to strengthen its position ahead of implementing economic policies likely centered on low interest rates. The Bank of Japan maintains a hawkish tone, and markets increasingly expect another tightening move as early as the April meeting.
XAU/USD
Gold prices are showing a slight decline on Friday morning, retreating from record highs. Quotes have again slipped below the 4600.0 level, although the fundamental backdrop remains largely unchanged. Demand for gold is steady as investors remain concerned about uncertainty surrounding US monetary policy and rising geopolitical risks. In particular, market participants continue to discuss protests in Iran and sharp criticism from Donald Trump over the Islamic Republic’s crackdown on demonstrators.
Many experts do not rule out a potential military operation aimed at regime change in the near future. This concern is heightened by the recent US detention of Venezuelan President Nicolás Maduro and his wife Cilia Flores, who are expected to face narcoterrorism charges. Tensions have also intensified around Greenland after the US president stated that control over the island is necessary for national security reasons.
At the same time, the US dollar is supported by relatively strong labor market data: initial jobless claims for the week ending January 9 fell from 207.0 thousand to 198.0 thousand, while continuing claims declined from 1.903 million to 1.884 million. This reinforces hawkish sentiment within the FOMC and supports maintaining the key interest rate within the 3.50–3.75% range until more convincing signs of economic slowdown and easing inflation pressures emerge.
