Client Portal
  1. FX Outlook
  2. Daily FX Report

Daily FX Report

Read disclaimer

Back to reports

Authors
Daria Efanova

Daria Efanova Head of Research

Contact research

US CPI Release to Influence Market Trends This Week

EUR / USD - Economic Data Places Strain on Euro

EURUSD sold off Friday, influenced by economic data from both the Eurozone and the US. Germany's Industrial Production report showed a concerning 2.4% month-over-month decrease in December, putting pressure on the euro and contributing to the pair's retreat below the 1.0350 level. In contrast, the US dollar remained resilient, bolstered by increasing inflation expectations and robust historical labour performance, despite marginal month-on-month softness.

This supports the hawkish narrative from the Fed. Meanwhile, The ECB is pushing forward with its digital Euro project, aiming to finalize legislation by the summer of 2025, in part to counter the influence of American stablecoins in Europe. While this could potentially strengthen the currency's position in the long term, the nearby momentum remains muted, with the 50 DMA level acting as a robust resistance level. 
Looking ahead, EUR/USD faces significant resistance around the 1.05 level, with many analysts favouring a strategy of selling on short-term rallies.

We expect the pair to remain subdued in the near term. Moreover, this week's US inflation release should further reiterate inflation stickiness, adding to dollar strength. 

USD / JPY - Speculation of BoJ Tightening Drives Yen Volatility

USD/JPY has experienced significant volatility, with a notable 2.43% decline last week. This downward trend was primarily driven by intensifying speculation about a potential BoJ rate hike, fuelled by strong wage growth data in Japan. The upcoming release of Japan's producer price index on Wednesday could further reinforce inflationary pressures and strengthen the case for BoJ tightening. Key support level is at 151.25 and a breach of this level could prompt further correction.

The pair is currently trading below both its 50-day and 200-day moving averages, suggesting bearish sentiment in the near term. Due to both technical and macroeconomic indicators, we anticipate that USD/JPY will remain subdued in the upcoming week.

GBP / USD - Pound Struggles Amid Economic Uncertainty

GBPUSD weakened once again, struggling to break higher but still maintaining the 1.2390 support level. The UK's economic outlook remains uncertain, global trade dynamics are shifting, and central bank monetary policy path divergence is becoming more prominent.

The upcoming US CPI report and Federal Reserve Chair Powell's speech in Congress will be crucial in shaping near-term USD sentiment, with market participants closely watching for signs of inflation trends and potential shifts in Fed policy.

The UK GDP release this week is forecast to point to a slowdown in economic growth, adding pressure on the pound. Overall, there are a few factors for this week that could push GBP/USD significantly higher. 

Contents

Disclaimer

This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

This report was prepared with the assistance of artificial intelligence.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

This report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Accordingly, the information may have been acted upon by us for our own purposes and has not been procured for the exclusive benefit of customers. Sucden Financial believes that the information contained within this report is already in the public domain. Private customers should not invest in these products unless they are satisfied that the products are suitable for them and they have sought professional advice. Please read our full risk warnings and disclaimers.

Sign up to get the latest market insights

We will email you each time a new report has been published.

You might also be interested in...

FX

Global markets are once again on edge as trade tensions between the U.S., Canada, and Mexico escalate. After months of uncertainty, the implementation of sweeping 25% tariffs on Canadian and Mexican imports has reignited fears of economic disruption, supply chain instability, and policy-driven volatility. With Canada and Mexico heavily dependent on US trade, how will this unfolding trade war affect the Canadian dollar and Mexican peso?
FX Monthly Report - Canada & Mexico Focus
Metals

As we enter the first quarter of 2025, trade tensions heavily influence market sentiment, with Trump’s tariffs narrative shaping the overall momentum. Volatility has gripped major asset classes – including FX, bonds, and equities – as markets attempt to gauge the scale, timing, and likelihood of these tariffs being fully implemented. While Chinese New Year holidays traditionally bring a quieter tone to the first quarter of the year, tariff announcements - such as a 10% tariff on Chinese imports and a 25% tariff on aluminium and steel - are injecting moderate volatility into the metals complex. What can we expect in the metal markets in the first months of 2025? 
Quarterly Metals Report
Coffee Fields Beat The Heat W

Brazil remains a dominant player in the coffee market, with farmers leveraging high domestic prices to maintain strategic selling practices despite wider dollar-based discounts. Nonetheless, challenging weather conditions throughout the growing season are casting a shadow over Brazil's coffee prospects. Understanding these dynamics is essential for making informed decisions as we move forward. Read our coffee crop update, with commentary on recent price activity, and coffee market forecasts to take advantage of market movements. 
Coffee Crop Update - Beat the Heat
UK Economy Outlook 2025

With a new government in place and a challenging global environment, what does 2025 hold for the UK economy?
UK Economy - 2025 Outlook
Electric Vehicles Report Image 2024

This report provides a comprehensive analysis of the EV market, with a particular focus being on supply chain analysis through mining, battery cell production, and sales of EVs. Additionally, we examine the implications of EV-specific tariffs, assessing their impact on cross-border trade, manufacturing costs, and company competitiveness.
Electric Vehicle and Battery Material Report - December 2024
Back to top

Subscribe

Select all the reports you wish to sign up for and submit your details below

Thank you for subscribing.

You should receive a confirmation email shortly. Please check your spam /junk mail folder if not received within a few minutes.

Do not forget to click the link in the confirmation message, otherwise, you will not receive any of our future emails.

This field is required
This field is required
This field is required
This field is required

Please note that we cannot email subscribers in the European Economic Area (EEA) or Switzerland, except for journalists.

(Please note that we cannot email subscribers in the European Economic Area (EEA) or Switzerland, except for journalists.)
You must agree to our terms and conditions before submitting the form
* Mandatory fields