Forex Market Review: Dollar Firms, German Ifo Rises
United States of America. The US dollar is strengthening against the pound and the yen, while showing mixed performance against the euro.
United States of America. The US dollar is strengthening against the pound and the yen, while showing mixed performance against the euro.
The US dollar shows mixed dynamics against the Japanese yen, with USD/JPY consolidating near the 155.75 level as overall market activity remains subdued. Traders are focused on data on foreign investment flows in Japanese markets: investment in foreign bonds slowed from ¥456.3 billion to ¥356.4 billion, while foreign investment in Japanese equities rose sharply from ¥132.8 billion to ¥528.3 billion, which is viewed as a positive signal for the yen.
The US dollar is strengthening today against the euro, the pound, and the yen. The focus of forex traders and investors remains on labor market data: in November, the unemployment rate rose from 4.4% to 4.6%, exceeding the forecast of 4.5% and reaching its highest level since 2021. Nonfarm payrolls increased from –105.0 thousand to 64.0 thousand, while private nonfarm employment rose by 69.0 thousand versus expectations of 45.0 thousand. At the same time, average hourly earnings accelerated from 0.2% to 0.4%.
Last week, the AUD/USD pair climbed to four-month highs near 0.6683 (Murray level [7/8]) but failed to break higher and entered a downward correction. This pullback appears to be primarily technical in nature, as the fundamental backdrop continues to favor further upside.
Forex traders are preparing for the upcoming corporate earnings season, but interest rates in major global economies remain the primary focus. After strengthening in August 2025, the precious metals sector entered a pause as investment flows were reallocated. Silver and platinum benefited the most from this shift; however, gold’s potential as a core safe-haven asset remains intact, and the key factors supporting the broader market are still in place.
The euro-to-dollar exchange rate (EUR/USD) has secured gains over the course of the current month and is trading slightly above the 1.1750 level, remaining close to its highest levels in the past 11 weeks.
EUR/USD quotes are moving toward the 1.1633 target as the U.S. dollar strengthens following the release of U.S. labor market data. According to the latest figures, nonfarm payrolls increased by 64.0K in November, exceeding the forecast of 50.0K and reversing the previous decline of –105.0K. The data confirmed the effectiveness of the Federal Reserve’s actions aimed at easing borrowing conditions. However, a negative factor remains the rise in the unemployment rate from 4.4% to 4.6% in November, in line with expectations. If unemployment continues to increase, the regulator may be forced to act more decisively in terms of policy easing, which could put pressure on the U.S. currency. It is also worth noting that interest rate expectations point to the policy rate remaining unchanged at 3.75% at the January 28 meeting, with the probability of this scenario currently estimated at 75.6%, according to the CME Group FedWatch Tool. Additional support for the dollar came from retail sales data, which showed a 3.5% year-on-year increase in October after a 4.2% rise previously, beating analysts’ expectations of 2.7%.
NQ 100. One of the leading U.S. indices, the NQ 100, is trading around 25,111.0 amid mixed macroeconomic data. Equity markets remain under pressure from still-elevated interest rates, which, according to current forecasts, are unlikely to be cut in the near term.
During the Asian session, the NZD/USD pair continues its corrective move near the 0.5773 level, with bearish signals strengthening after the release of data from New Zealand.
EUR/USD. The European currency remains relatively stable in the EUR/USD pair, with the instrument consolidating near the 1.1740 level as market participants await fresh catalysts to define the next directional move.
During the morning session, benchmark WTI Crude Oil prices are posting a modest rebound, consolidating near the 55.80 level while remaining close to April lows amid continued weakness in the US dollar.
The British pound is losing ground against the US dollar, with GBP/USD testing the 1.3400 level to the downside. At the same time, the pair remains close to its local highs recorded on October 17.
Prices for benchmark Brent Crude Oil are holding slightly below the 60.00 level, as the market continues to correct lower. Analysts attribute the pullback to falling prices for crude purchased by major global importers.
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