As most analysts had expected, officials kept the benchmark interest rate unchanged in the 3.50–3.75% range; however, the decision was not unanimous. Two Board members — Steven Miran and Christopher Waller — voted in favor of a 25 basis point rate cut, arguing that economic risks are beginning to outweigh inflation risks. The accompanying statement, nevertheless, was fairly optimistic. The Fed noted that economic activity continues to expand, while inflation remains “somewhat elevated.” It also highlighted a high degree of uncertainty in global markets, leaving room for a meaningful reassessment of policy goals at upcoming meetings. At present, the Federal Reserve maintains its 2026 rate forecast, which implies only one rate adjustment. Markets, however, are more aggressive, pricing in at least two policy easings. Uncertainty surrounding the successor to current Fed Chair Jerome Powell is intensifying ahead of his expected departure in May, with no official candidate announced. Earlier, White House economic adviser Kevin Hassett was mentioned among potential contenders and was long considered a frontrunner due to his close ties to the administration and criticism of the current Fed stance, but references to his candidacy have recently faded. It is increasingly clear that President Donald Trump will seek to appoint a nominee aligned with his preferences, particularly regarding more aggressive rate cuts, adding further uncertainty and shaping investor expectations. European investors will also focus today at 12:00 (GMT+2) on January eurozone sentiment data. Forecasts point to an improvement in business confidence, partly supported by the transparent monetary policy of the European Central Bank (ECB). The ECB has effectively завершed its rate-cutting cycle and does not rule out tightening if inflation risks intensify. Against the backdrop of growing global distrust toward the US dollar, the single currency is gaining additional support, while European companies are seeking to expand their market share. Analysts expect the eurozone economic sentiment index to rise from 96.7 to 97.0 points, while the services sentiment index may increase from 5.6 to 6.0 points. In the US, weekly jobless claims data will be released at 15:30 (GMT+2): initial claims for the week ending January 23 may rise from 200.0K to 205.0K, while continuing claims could increase from 1.849M to 1.860M.

GBP/USD

The pound is strengthening in the GBP/USD pair, once again approaching recent local highs after a brief pullback the previous day. The pair is testing the 1.3840 level for an upside breakout, while markets await new directional drivers. In the US, weekly jobless claims will be published at 15:30 (GMT+2), with initial claims expected to rise from 200.0K to 205.0K and continuing claims from 1.849M to 1.860M. At 17:00 (GMT+2), data on factory orders will be released, with analysts forecasting a 1.6% increase in November following a –1.3% decline previously. In the UK, housing price indices from the Nationwide Building Society will be published on Friday at 09:00 (GMT+2). It is worth recalling that the situation with house prices has proven more complex than previously thought. Last week, the Bank of England released its first Forecast Evaluation Report, acknowledging that in the post-COVID-19 period it systematically underestimated inflationary pressures, particularly so-called “second-round effects,” when rising prices fuel inflation expectations and wage demands. On average, two-year inflation forecasts were underestimated by around 2.0 percentage points, and wage growth forecasts by about 3.0 percentage points. These findings have significantly reduced the likelihood of faster rate cuts in 2026, as the regulator will need to act more cautiously to avoid losing control over inflation again. Meanwhile, markets remain focused on the outcome of the two-day Fed meeting that ended yesterday: as expected, the benchmark rate was left unchanged at 3.75%. The accompanying statement contained more optimistic assessments of economic growth, which markets interpreted as a signal of a longer pause before the next phase of monetary easing.

AUD/USD

The Australian dollar is strengthening in the AUD/USD pair, extending a pronounced short-term bullish trend. The instrument is testing the 0.7090 level for an upside breakout as traders assess import and export price index data. In the fourth quarter, the import price index rose by 0.9% after a –0.4% decline previously, while analysts had expected –0.2%. Export prices surged by 3.2%, reversing a –0.9% decline in the third quarter. The increase in both indicators further signals strengthening inflationary pressures, which may allow the Reserve Bank of Australia (RBA) to keep borrowing costs elevated for longer. This view was also supported by the inflation report released on Wednesday: the annual CPI for December rose from 3.5% to 3.6%, while the monthly figure increased by 1.0% after stagnating previously, versus expectations of 0.7%. The year-on-year CPI for Q4 2025 jumped from 3.2% to 3.8%, exceeding forecasts of 3.6%, although the quarterly rate slowed from 1.3% to 1.0% against an expected 0.7%. Meanwhile, the trimmed mean CPI published by the Australian Bureau of Statistics increased from 3.2% to 3.3%. At the same time, the US dollar remains under pressure amid risks of a new government shutdown in the US: if Congress fails to approve a new budget by midnight on January 30, the federal government may again be forced into unpaid furloughs.

USD/JPY

The US dollar is losing ground in the USD/JPY pair, erasing the previous day’s bullish impulse that had allowed the instrument to retreat from late-October lows. Prices are testing the 153.00 level for a downside breakout, while investors digest the outcome of the Fed meeting, at which the benchmark rate was, as expected, kept at 3.75%. The accompanying statement contained more optimistic assessments of economic growth, which markets interpreted as a signal of a potentially longer pause before the next round of monetary easing. Two members of the Federal Open Market Committee (FOMC) voted for an immediate 25 basis point rate cut, pointing to growing internal disagreements, though this does not alter the overall policy trajectory. Fed Chair Jerome Powell avoided commenting on dollar fluctuations, noting that currency policy falls under the remit of the US Treasury. Earlier, President Donald Trump also commented on the dollar, saying he was not concerned about its sharp decline to four-year lows and preferred to let the market determine a “fair level.” Meanwhile, the yen is under pressure from the fiscal policy of Prime Minister Sanae Takaichi’s government. Ahead of snap parliamentary elections scheduled for February 8, the administration announced a two-year suspension of the 8.0% tax on food products. Promises of large-scale fiscal spending without accompanying structural reforms have raised serious concerns among investors about the sustainability of Japan’s already massive public debt, which exceeds 230.0% of GDP. Against this backdrop, government bond yields have surged sharply, further weighing on the national currency. Finally, investors continue to monitor statements from Japanese officials that could hint at the timing of potential FX intervention should the yen return to a bearish trend and approach the psychological 160.00 level. Tomorrow at 01:30 (GMT+2), January inflation data will be released, with forecasts suggesting that Tokyo’s core CPI excluding food and energy may ease from 2.3% to 2.2%, potentially hindering the Bank of Japan’s plans to tighten monetary policy. At 01:50 (GMT+2), retail sales and industrial production figures for December will also be published, with output expected to fall by 0.4% m/m after a –2.7% decline previously.

XAU/USD

The XAU/USD pair is gaining during the morning session, extending a strong short-term and ultra-short-term bullish trend. The instrument is preparing to test the key resistance level at 5560.00, updating record highs. A 4.4% surge in gold prices during the previous trading session is part of a broader uptrend: since the beginning of 2026, gains have exceeded 20.0%, while in 2025 they amounted to more than 64.0%. The current dynamics are driven by a combination of interconnected fundamental factors, with structural weakening of the US dollar in global markets at the core. The dollar index is hitting its lowest levels since 2022, potentially prompting intervention by the Federal Reserve. However, President Donald Trump moved to reassure markets yesterday, stating that he considers the dollar’s level “normal” and prefers to let the market determine its “fair value.” Dollar weakness is exacerbated by domestic political and economic uncertainty in the US. Analysts note that expectations of a new government shutdown, as well as the upcoming change of the Fed chair in May, are adding pressure. These developments create institutional risks and encourage investors to rebalance portfolios toward safer assets. An additional factor is escalating geopolitical tension, particularly between the US and Iran, which is driving demand for protection outside traditional currency assets. Today at 15:30 (GMT+2), traders will assess US jobless claims data, with initial claims for the week ending January 23 expected to rise from 200.0K to 205.0K and continuing claims from 1.849M to 1.860M. At 17:00 (GMT+2), factory orders data will also be released, with forecasts pointing to a 1.6% increase in November following a –1.3% decline previously.