In January, wholesale inventories in the United States increased by 0.7%, surpassing the forecast of 0.1%. This growth is indicative of inventory management levels in the market.

Meanwhile, the EUR/USD currency pair is stabilising around 1.0400 following the US Personal Consumption Expenditures (PCE) inflation data. Gold has dropped to below $2,840, reflecting bearish pressure amid uncertainties regarding trade policy.

GBP/USD also remains firm above 1.2600 in response to the PCE results. The upcoming week will feature key events, including US payroll data and an ECB rate meeting, alongside a focus on tariff concerns from the Trump administration.

The uptick in wholesale inventories suggests that businesses are either stockpiling in anticipation of stronger demand or struggling with slower sales, leading to a build-up of goods. A rise of 0.7% instead of the expected 0.1% means businesses are holding onto more products than analysts had estimated. If this continues, it might indicate weaker consumer demand, which would impact future production rates. It will be key to monitor whether this trend extends into the next couple of months, as it could shape expectations for broader economic activity.

Over in currency markets, the euro’s relative steadiness suggests that traders have largely priced in the latest US inflation data. For now, the pair is showing little intention of a sharp movement in either direction. If there is a fresh development from the Federal Reserve or the European Central Bank, we might see a clearer trend emerge. Likewise, the drop in gold prices below $2,840 aligns with traders seeking safer positions elsewhere, particularly as trade policy uncertainty weighs on sentiment. Those active in such markets should keep a close eye on how the US approaches tariffs, as any unexpected moves could trigger volatility.

Looking at the pound, its stability above 1.2600 suggests that investors are comfortable with how the latest inflation figures are shaping expectations for both the Federal Reserve and the Bank of England. As we move ahead, the labour report in the US will be one of the determining factors for rate bets. If employment figures come in stronger than predicted, the dollar could regain strength, applying pressure on both the euro and the pound.

At the same time, traders need to account for the European Central Bank’s meeting later in the week. If policymakers indicate a firmer stance on policy adjustments, the euro may break out of its current range. However, if they remain cautious, we are likely to see limited movement. Other forces at play include ongoing trade discussions in Washington. This could introduce fresh shocks depending on how restrictive any proposed measures turn out to be.

For those navigating short-term trades, staying attuned to payroll data and central bank rhetoric will be key. The next few sessions could shape expectations not just for the month ahead but for broader currency and commodity trends.