Dollar rose in European trade against a basket of major rivals away from recent eight-month lows, but gains remain limited due to Fed interest rate prospects. 

Now investors await important US data later today for January, which will provide important clues on first quarter growth. 

The Index

The dollar index rose 0.2% to 102.17, with a session-low at 101.71, after rising 0.1% yesterday, the first profit in three days away from eight-month lows at 101.52. 

Fed Rates

Pricing for a 0.25% rate hike by the Federal Reserve in February stands at 100%, slowing it down from recent 0.5% rate hikes.

Major Sectors

Now investors await a batch of crucial important data later today on the US economy, including the manufacturing PMI, expected at 46 in January, down from 46.2 in December, and the services PMI, expected at 45.3. 

Britain's services PMI came at 46.7 in January, the best in four months while still shrinking for the sixth month in a row, beating estimates of 45.4, and up from 45.3 in December. 

Europe's services PMI came at 48.8 in January, shrinking for the seventh month in a row, while beating estimates of 48.6, and above December's 47.8 reading. 

Gold prices rose in European trade for the second session, hitting nine-month highs as dollar weakened against a basket of major rivals. 

Dollar is hovering near eight-month lows on prospects the Federal Reserve will slow down its policy tightening and rate hikes from 0.5% to 0.25% in February. 

Gold Prices Today

Gold prices rose 0.6% to $1,942 an ounce, the highest since April 2022, with a session-low at $1,930, after rising 0.3% yesterday, the second profit in three dollars as dollar weakened. 

The Dollar

The dollar index fell 0.3% on Tuesday on track to test eight-month lows again against a basket of major rivals, in turn underpinning gold and other precious metals. 

Pricing for a 0.25% rate hike by the Federal Reserve in February stands at 100%, slowing it down from recent 0.5% rate hikes.

Expectations

Many analysts currently expect gold prices to build up an upward momentum as the Fed is forced to slow down its pace of policy tightening, in turn underpinning the precious metal. 

Actual Demand

India is expected to cut down its gold importing fees, in turn raising retail sales and making the metal cheaper ahead of its peak demand season.