USD rebounded modestly as a sharp selloff in precious metals and broader commodity weakness dragged on FX, with AUD and NZD leading G10 losses. The moves were exacerbated by month-end flows and position unwinds after the recent USD selloff went too far.
Elsewhere, EUR and GBP edged lower, while USDJPY slipped slightly, leaving the broader move looking more like a corrective bounce in the greenback than a shift in trend.
*Daily move - against G10 rates as of 17:00 GMT, 29.01.26
** Indicative rates - interbank rates as of 17:00 GMT, 29.01.26
USD remains supported this morning as markets priced a rising probability that former Fed Governor Kevin Warsh will be nominated as the next Fed Chair. Kevin Warsh’s hawkish track record pushed treasury yields and USD higher.
Eurozone data is expected to show a mild slowdown in momentum, with Q4 GDP seen easing to 1.3% YoY, while German inflation is forecast to remain subdued, flat on the month and only slightly higher at 1.9% YoY.
In the US, producer price inflation is expected to stay contained, with PPI unchanged at 0.2% MoM and easing to 2.8% YoY, reinforcing the view that upstream price pressures continue to cool gradually.
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