ForexLive European FX news wrap: Dollar holds firm with Fed in focus

<p>Headlines:</p><ul><li><a href="https://www.forexlive.com/news/european-bond-yields-fall-on-french-inflation-data-20240131/">European bond yields fall on French inflation data</a></li><li><a href="https://www.forexlive.com/news/sp-500-futures-extend-losses-as-tech-shares-sink-lower-20240131/">S&amp;P 500 futures extend losses as tech shares sink lower</a></li><li><a href="https://www.forexlive.com/centralbank/ecbs-de-guindos-i-think-that-inflation-will-be-slightly-lower-than-we-have-predicted-20240131/">ECB's de Guindos: I think that inflation will be slightly lower than we have predicted</a></li><li><a href="https://www.forexlive.com/news/france-january-preliminary-cpi-31-vs-37-yy-prior-20240131/">France January preliminary CPI +3.1% vs +3.7% y/y prior</a></li><li><a href="https://www.forexlive.com/news/bavaria-january-cpi-29-vs-34-yy-prior-20240131/">Bavaria January CPI +2.9% vs +3.4% y/y prior</a></li><li><a href="https://www.forexlive.com/news/germany-december-import-price-index-11-vs-05-mm-expected-20240131/">Germany December import price index -1.1% vs -0.5% m/m expected</a></li><li><a href="https://www.forexlive.com/news/germany-december-retail-sales-16-vs-07-mm-expected-20240131/">Germany December retail sales -1.6% vs +0.7% m/m expected</a></li><li><a href="https://www.forexlive.com/news/germany-january-unemployment-change-2k-vs-11k-expected-20240131/">Germany January unemployment change -2k vs 11k expected</a></li><li><a href="https://www.forexlive.com/news/uk-january-nationwide-house-prices-07-vs-01-mm-expected-20240131/">UK January Nationwide house prices +0.7% vs +0.1% m/m expected</a></li><li><a href="https://www.forexlive.com/news/switzerland-january-credit-suisse-investor-sentiment-195-vs-237-prior-20240131/">Switzerland January UBS investor sentiment -19.5 vs -23.7 prior</a></li></ul><p>Markets:</p><ul><li>USD leads, AUD lags on the day</li><li>European equities a little higher; S&amp;P 500 futures down 0.5%</li><li>US 10-year yields down 2.5 bps to 4.031%</li><li>Gold flat at $2,037.12</li><li>WTI crude down 1.0% to $77.01</li><li>Bitcoin down 2.1% to $42,617</li></ul><p>All ready for the Fed and Powell's press conference later today?</p><p>The dollar is keeping steadier so far today, continuing to ignore the push lower in Treasury yields this week. There was some back and forth action in European trading but the greenback is settling slightly higher now ahead of US trading.</p><p>USD/JPY fell to around 147.40 in early European trading but has now recovered to sit higher at 147.80 levels on the day. Meanwhile, the euro itself also saw a dip to 1.0808 against the dollar only to recover slightly to 1.0830 currently. The drop in the euro came after the French inflation data, which reaffirmed a downtrend in prices in the region.</p><p>Besides that, there was little to work with as the dollar generally kept steadier across the board. The aussie is the laggard though, after falling on softer inflation data. AUD/USD is down 0.3% to 0.6580 but continues to trade more sideways in the big picture, as noted earlier <a href="https://www.forexlive.com/news/aussie-the-laggard-after-softer-inflation-data-earlier-today-20240131/" target="_blank" rel="follow">here</a>.</p><p>In other markets, bond yields in Europe and the US are weighed down with the former reacting to the soft inflation numbers from France and German states. In the equities space, tech shares are a real drag with Nasdaq futures down by 1.1% on the day. That being said, stocks are poised to wrap up a solid month; all else being equal.</p><p>It's now over to the ADP employment data in just a bit, before the focus turns towards the Fed in trading this week.</p>

This article was written by Justin Low at www.forexlive.com.