In January, US durable goods orders exceeded forecasts, rising by 3.1%, while expectations had been set at 2%. This performance indicates a robust demand in the manufacturing sector, contributing positively to economic indicators.
The Euro to US Dollar pair has declined to around 1.0420 due to a stronger US Dollar. Meanwhile, GBP/USD has also fallen to two-day lows of approximately 1.2630 as the US Dollar gains traction.
Gold prices have decreased, reaching near two-week lows around $2,880 per ounce amid rising yields and an improving Dollar. Bitcoin has momentarily recovered to around $86,000, despite a sharp decline earlier in the week.
In Europe, inflation is expected to drop significantly in France due to reduced regulated electricity prices, though challenges remain as service prices continue to rise across the Eurozone.
The durable goods figures for January were stronger than anticipated, rising by 3.1% when economists had only projected a 2% increase. That strength reflects solid demand within manufacturing, which plays directly into broader economic momentum in the US. When businesses are ordering more machinery and equipment, it suggests confidence in future production needs. This development ties into expectations for interest rate policy, as the Federal Reserve monitors such data closely when determining its next steps.
The Euro has weakened against the US Dollar, falling to around 1.0420, which aligns with broader Dollar strength. A similar trend has played out with the British currency, dipping to 1.2630 against the Dollar over the past two days. The upward movement in the US currency points to investors prioritising safer assets amid global uncertainty. When the Dollar strengthens, it tends to apply downward pressure on competing currencies, particularly when risk appetite wanes.
Gold prices have also moved lower, reaching levels not seen in nearly two weeks. With yields rising and the Dollar continuing to firm up, it makes sense that gold has lost some appeal. Investors might be rotating into assets offering higher returns as yields climb. Gold typically thrives when inflation fears dominate or during periods of heightened geopolitical stress, but for now, traders appear to be adjusting their positioning accordingly.
Bitcoin saw a temporary rebound to roughly $86,000 after experiencing a sharp sell-off earlier in the week. Digital assets have been volatile, and while the recovery eases some concerns, the market remains on edge. Traders will likely be watching closely for any signs of additional turbulence.
In France, inflation is expected to drop largely thanks to a reduction in regulated electricity prices. However, that’s only one piece of the broader inflation story. Other costs, particularly in the service sector, continue to rise throughout the Eurozone. While headline numbers might suggest easing pressure, underlying trends could force the central bank to remain cautious when discussing rate adjustments.
Each of these factors shifts the calculus for traders looking at derivatives markets. Economic strength in the US makes bets on rate cuts less appealing. A strong Dollar keeps pressure on rival currencies, reinforcing trends in forex markets. Gold and Bitcoin remain sensitive to changes in investor sentiment, meaning sharp moves can’t be ruled out. Finally, European inflation remains unpredictable, demanding close attention from those trading around rate policy expectations.
