[MARKET ANALYSIS] AUD outpaces on gold and copper; G10s largely firmer vs USD

DXY resides in a current 96.01-96.35 range, well within yesterday's 95.859-96.787 parameter, with little move seen on the FOMC and presser yesterday. To recap, the Fed unsurprisingly maintained its rates at 3.50%-3.75% through a 10-2 vote split with Miran and Waller calling for a 25bps rate cut. There was a lack of major surprises and fireworks from the meeting and presser, although Powell noted that rates are at the higher end of the range of neutral, and if they see the tariff effect on goods pricing peaking over this year, that would tell the Fed it can loosen policy. Ahead, stateside, US initial jobless claims for the week of 24th January are expected at 205k from 200k, while continuing claims (17th January week, coinciding with the BLS' traditional survey window for the January jobs report) are seen at 1.86mln from 1.849mln. The Chicago Fed's Labour Market Indicators are also out today. Final unit labour costs data for Q3 are also due. Trade stats from the US for November, and elsewhere, factory orders for November.
EUR/USD remains sub-1.2000 after finding some resistance at 1.1996 overnight, whilst still remaining within yesterday's 1.1896-1.2045 range. There's been little of note for the EUR as participants gear up for next week's ECB, with some focus on EUR commentary within the Governing Council. Aside from that, largely USD-dictated action this morning.
GBP/USD found resistance near yesterday's high (1.3846) before waning, with the pair within yesterday's parameter. Newsflow for the UK has been light, whilst UK PM Starmer visited Beijing and met with Chinese President Xi Jinping in an effort to reset bilateral relations. Traders also look ahead to next week's BoE. Pantheon Macroeconomics expects a 6–3 vote to hold, with Taylor, Ramsden and Dhingra seen favouring 25 bps cuts, arguing the decision itself is a foregone conclusion and that guidance is likely to continue signalling a “gradual downward path” for rates, albeit with longer gaps between cuts than seen in 2025. Pantheon also expects updated forecasts to look relatively hawkish, with inflation projected to remain above target at the two- and three-year horizons, even as November Budget measures lower near-term inflation. “All told, we think the market is right to fully price only one more rate cut this year, with a chance of hikes starting early in 2027,” Pantheon says.
USD/JPY is softer and back under its 100 DMA (153.71) within a 152.76-153.46 band, in price action largely in tandem with the USD in the absence of fresh macro drivers. Traders will be keeping an eye on the geopolitical landscape amid further punchy rhetoric from both Iran and the US. Domestically, a Nikkei poll showed that Japanese PM Takaichi's party is expected to gain a Lower House majority.
Antipodeans outperform with AUD outpacing peers, as the commodity-linked currency benefits from the surge in spot gold and copper prices, despite a lack of obvious drivers for the magnitude of gains seen. Data from Australia also saw firmer export and import price data from Australia.