• [gtranslate]

Market Insight 08-01-2026

  • Home
  • Market Insight 08-01-2026

Daily Currency Market Update – 8 January 2026

Market Overview

Markets turned cautious on Thursday as investors awaited a fresh round of US data, including Initial Jobless Claims, Trade Balance, and Unit Labour Costs.

The US Dollar held steady near 98.70 after two days of gains, supported by a strong ISM Services PMI reading (54.4, the highest since October 2024) and an improvement in the Employment Index. JOLTS job openings fell sharply to 7.14 million, but the upbeat services data kept USD supported.

European equities opened softer, with sentiment weighed by upcoming Eurozone business and consumer confidence indicators and November PPI.

GBP/EUR

GBP/EUR slipped back to 1.1500, with the Euro stabilising after investors largely brushed off soft Eurozone HICP data.

Key drivers:

  • Eurozone headline HICP rose 2.0% y/y, in line with expectations.
  • Core HICP eased to 2.3%, slightly below forecasts.
  • German Retail Sales disappointed at –0.6% m/m, but the Euro found support from improving risk sentiment.
  • The BoE continues to guide for a gradual easing path, with markets pricing at least one cut in H1 and a ~50% chance of a second by year‑end.

Investors now await comments from ECB Vice President Luis de Guindos for policy cues.

Outlook: GBP/EUR likely range‑bound ahead of Eurozone sentiment data. BoE caution provides a mild GBP floor.

GBP/USD

GBP/USD trades near 1.3450, extending its decline for a third session.

Drivers:

  • USD firmed after the ISM Services PMI surged to 54.4, with strong sub‑components (Employment Index up to 52).
  • Analysts warn that robust US services activity could delay Fed easing, weighing on GBP/USD.
  • UK data remains light, leaving GBP driven by global sentiment and expectations for next week’s UK labour market report.

Outlook: GBP/USD remains sensitive to US data. Friday’s NFP is the key directional catalyst.

EUR/USD

EUR/USD consolidates below 1.1700, trading around 1.1680.

Pressure stems from:

  • Weak German inflation and downward revisions to Eurozone PMIs.
  • German Factory Orders surprised to the upside (+5.6% m/m), but failed to lift the Euro.
  • Markets remain cautious ahead of US labour data and Eurozone sentiment indicators.

Outlook: EUR/USD likely to remain subdued until Friday’s NFP. Eurozone unemployment and confidence data may offer short‑term volatility.

AUD/USD

AUD/USD retreats toward 0.6700, reversing Wednesday’s gains.

Key factors:

  • Australia’s trade surplus narrowed sharply to 2.94bn, with exports down 2.9% m/m.
  • Mixed November CPI leaves RBA policy uncertain; focus shifts to Q4 CPI later this month.
  • RBA Deputy Governor Hauser said inflation was “as expected” and rate cuts are unlikely anytime soon.
  • USD strength following the ISM Services beat added downside pressure.

Outlook: AUD/USD direction hinges on US data today and Australia’s Q4 CPI later this month.

USD/CAD

USD/CAD extends gains to ~1.3860, rising for a fifth straight session.

Drivers:

  • Concerns that Venezuelan oil could replace some Canadian supply in the US weighed on CAD.
  • PM Mark Carney said Canadian crude remains competitive, but markets remain cautious.
  • Canada’s Ivey PMI rebounded strongly to 51.9, but falling oil prices overshadowed the improvement.
  • USD steady ahead of NFP and ISM Services PMI.

Outlook: USD/CAD remains supported unless oil stabilises or US data disappoints.

USD/CHF

USD/CHF trades near 0.8000, rising for a third consecutive day.

Key points:

  • Swiss CPI stagnated in December (0.0% m/m), against expectations of a decline.
  • Y/Y inflation ticked up to 0.1%, but remains too low to shift SNB policy.
  • CHF demand is supported by Venezuela‑related geopolitical tensions and Russian naval activity near Venezuelan waters.
  • USD strength from ISM Services PMI continues to underpin the pair.

Outlook: USD/CHF may face resistance near 0.8000. Volatility likely muted until Friday’s NFP.

Final Summary

Markets turned cautious ahead of a heavy US data slate, with the Dollar steady after strong ISM Services data. Sterling softened against the Dollar but held firm versus the Euro. The Euro remained pressured despite strong German Factory Orders. The Australian Dollar fell on weaker trade data and RBA uncertainty, while CAD weakened on oil‑related concerns. CHF strengthened on geopolitical risk but USD/CHF continued to grind higher.