America’s Roundup: Dollar underpinned by Fed rate outlook, Gold drops 1%,Oil prices climb Oil prices climb

Market Roundup

•French 12-Month BTF Auction 2.489%,2.435% previous

•French French 3-Month BTF Auction 2.691%, 2.704% previous

•French 6-Month BTF Auction 2.593%, 2.592% previous

•US  CB Employment Trends Index (Dec) 109.70,109.55 previous

•US Consumer Inflation Expectations (Dec) 3.0%    , 3.0% previous

•US 3-Month Bill Auction 4.225%,4.205% previous

•US 6-Month Bill Auction  4.180%, 4.110% previous

Looking Ahead Economic Data (GMT)

•00:30 Australia Building Approvals (MoM) (Nov) -3.6% forecast, 4.2% previous

•00:30 Australia Private House Approvals (Nov) -1.7% forecast, -5.2% previous 

•05:00 Japan  Economy Watchers Current Index (Dec) 49.4 forecast,  49.4 previous         

Looking Ahead Events and Other Releases (GMT)

 •No Events Ahead

Currency Forecast

EUR/USD: The euro rebounded against the dollar on Monday as Friday's blowout U.S. jobs report underscored economic strength and fueled growing doubts about the Federal Reserve cutting interest rates this year. The U.S. economy added more jobs than anticipated in December, strengthening expectations that borrowing costs in the U.S. will stay elevated for an extended period, which boosted the dollar and pushed U.S. Treasury yields to multi-month highs. The dollar has been on the rise ahead of U.S. President-elect Donald Trump's inauguration on Jan. 20. The euro  was down 0.33% at $1.0206 after touching its weakest since November 2022 at $1.0177. Immediate resistance can be seen at 1.0292(50%fib), an upside break can trigger rise towards 1.0333(61.8%fib).On the downside, immediate support is seen at 1.0243(38.2%fib), a break below could take the pair towards 1.0181(23.6%fib).

GBP/USD: The British pound bounced back on Monday as investors looked ahead to the U.K.'s December CPI and November GDP data, set for release on Thursday. Consumer prices are expected to have risen 2.6% annually in December, in line with November. Futures markets are pricing in around 16 basis points of easing at the BoE's February meeting, implying around a 65% chance of a quarter-point rate cut. The pound has been under pressure from concerns over rising borrowing costs and growing unease over Britain's finances. It tumbled 1.8% last week. Immediate resistance can be seen at 1.2200(38.2%fib), an upside break can trigger rise towards 1.23411(50%fib).On the downside, immediate support is seen at 1.2205(38.2%fib), a break below could take the pair towards 1.2073(23.6%fib)

USD/CAD: The Canadian dollar edged up against its U.S. counterpart on Monday and bond yields climbed to multi-month highs, with the currency recouping a small part of its recent declines that were owed in part to the threat of U.S. trade tariffs. The Bank of Canada has said the possibility of U.S. tariffs represented a major new uncertainty.Still, investors have become slightly less confident the BoC will continue cutting interest rates this month after data on Friday showed that the Canadian economy added many more jobs than expected in December.The price of oil, one of Canada's major exports, settled 2.9% higher at $78.82 a barrel on expectations that wider U.S. sanctions on Russian oil would force buyers in India and China to seek other suppliers. Immediate resistance can be seen at 1.4417(38.2%fib), an upside break can trigger rise towards 1.4535(23.6%fib).On the downside, immediate support is seen at 1.4424(50%fib), a break below could take the pair towards 1.4260 (61.8%fib).

 USD/JPY: The U.S. dollar slipped lower on Monday as the yen benefitted from its safe-haven appeal and growing expectations of a rate hike by the Bank of Japan in January. The BOJ noted that broadening wage hikes in Japan, driven by structural labor shortages, are pushing firms to continue increasing pay. This suggests that conditions for a near-term interest rate hike are falling into place. The BOJ has consistently stated that sustained, broad-based wage hikes are necessary before raising short-term interest rates from the current 0.25%, with some analysts speculating that a rate hike could come as soon as its policy meeting later this month. Immediate resistance can be seen at 157.77 (38.2%fib) an upside break can trigger rise towards 159.00(Psychological level). On the downside, immediate support is seen at 156.42(38.2%fib) a break below could take the pair towards 155.85 (50%fib).

Equities Recap

European shares fell sharply on Friday, marking their steepest decline in three weeks, after a strong U.S. jobs report fueled fresh inflation concerns and reinforced expectations that the Federal Reserve will take a cautious stance on rate cuts.

UK's benchmark FTSE 100 closed down by 0.86 percent, Germany's Dax ended down by 0.50 percent, France’s CAC finished the day down by  0.79 percent.

U.S. stocks dropped, with the S&P 500 erasing its 2025 gains, as a positive jobs report reignited inflation concerns and strengthened expectations that the Federal Reserve will take a cautious approach to interest rate cuts this year.

Dow Jones closed down by  1.66  percent, S&P 500 closed down   by 1.55 percent, Nasdaq settled down by 1.64percent.

Commodities Recap

Gold prices dipped on Monday as the U.S. dollar soared to an over two-year high after a robust jobs report last week cemented expectations the Federal Reserve will proceed with caution with cutting interest rates this year.

Spot gold fell 1% to $2,661.76 per ounce as of 03:57 p.m. ET (2057 GMT). Prices hit their highest in a month on Friday. U.S. gold futures settled 1.3% lower at $2,678.60.

Oil prices climbed about 2% to a four-month high on Monday on expectations that wider U.S. sanctions on Russian oil would force buyers in India and China to seek other suppliers.

Brent futures rose $1.25, or 1.6%, to settle at $81.01 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $2.25, or 2.9%, to settle at $78.82.