Euro resumes gains near nine-month high
Euro rose in European trade against dollar after a two-day hiatus from gains, on track to retest nine-month highs on prospects of ECB's policy tightening.
The European Central Bank is expected to increase interest rates by 50 basis points at the first meeting of 2023 next Thursday, with another 0.5% rate hike in March.
EUR/USD rose 0.2% to 1.0884, with a session-low at 1.0853, after closing down 0.25% on Friday, the second loss in a row on profit-taking off nine-month highs at 1.0929.
Euro rose 0.1% against dollar last week, the third weekly profit in a row as concerns about a policy gap between Europe and the US cease.
The ECB
ECB President Christine Lagarde said recently that inflation remains too high and the bank is committed to continuously increase interest rates until inflation is brought back to 2%.
Lagarde once again repeated the use of the phrase "staying the course" when talking about interest rate decisions at upcoming meetings, meaning the current pace will be maintained at least until the second quarter of the year.
Other ECB members strongly hinted at multiple 0.5% rate hikes in both February and March.
Estimates
Despite current losses, analysts still expect the euro to pierce $1.1 in the short term as the ECB prepares a rate hike that's double the hike of the Fed.
Broadly, the euro is expected to advance against most major rivals to year-highs.
Gold trapped in tight trading as markets asses dollar's movements
Gold prices settled on Friday inside a tight range of trading as markets assess dollar's movements against a basket of major rivals.
Recent data showed US economy grew 2.9% in the fourth quarter of 2022, beating estimates of 2.6%, while up from 3.2% in the third quarter.
US consumer spending, an important index for inflation, rose 0.3% last month.
Such data indicate the strength and vitality of the economy, which is reflected in recent statements by the IMF expecting the US recession to avoid recession this year.
The dollar index rose 0.15% as of 18:17 GMT to 101.9, with a session-high at 102.1, and a low at 101.6.
Gold spot prices steadied at $1,929.5 an ounce as of 18:18 GMT.
Will the Federal Reserve maintain tight monetary policies?
Global Central Banks in Europe, the US, and England will meet next week to decide on policies.
The Federal Reserve is widely expected to increase interest rates and carry on its policy tightening to control inflation.
Wall Street barely gains ground
US stock indices rose on Friday after a batch of US data while markets assess corporate results.
Recent data showed US economy grew 2.9% in the fourth quarter of 2022, beating estimates of 2.6%, while up from 3.2% in the third quarter.
US consumer spending, an important index for inflation, rose 0.3% last month.
Such data indicate the strength and vitality of the economy, which is reflected in recent statements by the IMF expecting the US recession to avoid recession this year.
Dow Jones rose 0.1% as of 15:28 GMT to 33,994, while S&P 500 rose 0.2%, or 7 points to 4,068, as NASDAQ gained 0.4%, or 48 points to 11,560.
Will the Federal Reserve maintain tight monetary policies?
Global Central Banks in Europe, the US, and England will meet next week to decide on policies.
The Federal Reserve is widely expected to increase interest rates and carry on its policy tightening to control inflation.
Palladium falls 3% as investors assess data
Palladium prices fell on Friday as the dollar gained ground against most major rivals as investors assess latest data.
US economy grew 2.9% in the fourth quarter of 2022, beating estimates of 2.6%, while up from 3.2% in the third quarter.
US durable goods orders rose 5.6% in November, beating estimates of 2.4%, and improving from October's 2.1% decline.
US unemployment claims tumbled to 181 thousand in the week ending January 21, the slowest since last April, and below estimates of 203 thousand, while also down from 192 thousand in the previous reading.
US consumer spending, an important index for inflation, rose 0.3% last month.
Such data indicate the strength and vitality of the economy, which is reflected in recent statements by the IMF expecting the US recession to avoid recession this year.
The dollar index rose 0.1% to 101.8, with a session-high at 102.1, and a low at 101.6.
Palladium futures due in March as of 15:11 GMT fell 2.7% to $1,620 an ounce.
Will Palladium Extend Losses?
Despite giving up both the $3000 and $2000 thereafter after the Russian-Ukrainian war, now analysts expect palladium to regain some ground as demand improves on industrial metals while China eases Covid restrictions.