EUR/USD: The euro eased against the dollar on Wednesday as investors continued to await concrete announcements about U.S. President Donald Trump's tariff plans.Trump said late on Tuesday his administration was weighing imposing a 10% tariff on goods imported from China on Feb. 1, after he earlier said Mexico and Canada could face levies of around 25% by Feb. 1.He also promised duties on European imports, without elaborating further. Meanwhile, European Central Bank policymakers supported further rate cuts on Wednesday, suggesting a reduction next week is almost certain, with more cuts likely even if the U.S. Federal Reserve adopts a more cautious approach. Immediate resistance can be seen at 1.0440(50%fib), an upside break can trigger rise towards 1.0500(Psychological level).On the downside, immediate support is seen at 1.0374(38.2%fib), a break below could take the pair towards 1.0307(23.6%fib).
GBP/USD: The pound slipped lower on Wednesday as traders focused on BoE guidance in February. Sterling may cool markets appearing to ignore fresh tariff threats from new U.S. President Donald Trump, who vowed to hit the European Union with tariffs and said his administration was discussing a 10% punitive duty on Chinese imports. Britain ran a bigger-than-expected budget deficit in December, swelled by debt interest costs and a one-off purchase of military homes, according to official data that underlined the fiscal pressure faced by finance minister Rachel Reeves. Public sector net borrowing was 17.8 billion pounds ($22 billion) in December, more than 10 billion pounds higher than a year earlier, the Office for National Statistics said on Wednesday. Immediate resistance can be seen at 1.2373(Daily high), an upside break can trigger rise towards 1.2434(50%fib).On the downside, immediate support is seen at 1.2310(38.2%fib), a break below could take the pair towards 1.2141(23.6%fib).
USD/CAD: The Canadian dollar weakened against the U.S. dollar on Wednesday as investors anticipated the Bank of Canada may cut its benchmark interest rate further below the Federal Reserve's key rate next week. On Tuesday, the currency hit its weakest intraday level in almost five years at 1.4515 after U.S. President Donald Trump indicated he was considering imposing a 25% tariff on Canadian goods starting Feb. 1. Investors now see an 80% chance the Bank of Canada will cut rates by 25 basis points to 3% on Jan. 29, creating a historically wide gap of 150 basis points below the Federal Reserve's 4.25%-4.50% range. Canadian retail sales data for November, due Thursday, could provide insights into the strength of the domestic economy, with economists predicting a 0.2% month-over-month gain. Immediate resistance can be seen at 1.4425 (23.6%fib), an upside break can trigger rise towards 1.4465(Higher BB).On the downside, immediate support is seen at 1.4309(Lower BB), a break below could take the pair towards 1.4245 (38.2%fib).
USD/JPY: The U.S. dollar strengthened against the yen on Wednesday, but gains were limited as investors awaited the Bank of Japan's (BOJ) rate decision later this week. The BOJ is expected to raise interest rates on Friday, unless market disruptions occur due to U.S. President-elect Donald Trump's inauguration. This hike would increase short-term borrowing costs to levels not seen since the 2008 financial crisis, with the BOJ likely raising its short-term policy rate to 0.5%. The bank is also expected to revise its price forecasts upward, driven by expectations that rising wages will help Japan meet its 2% inflation target sustainably. Immediate resistance can be seen at 156.61 (38.2%fib) an upside break can trigger rise towards 157.00(Psychological level). On the downside, immediate support is seen at 155.43(50%fib) a break below could take the pair towards 154.23 (Lower BB).
Equities Recap
European stocks closed higher on Wednesday, supported by strong performances in the technology and industrial sectors, as markets appeared unbothered by tariff concerns raised by recent statements from U.S. President Donald Trump.
UK's benchmark FTSE 100 closed up by 0.01 percent, Germany's Dax ended down by 0.02percent, France's CAC finished the day up by 0.86 percent.
Wall Street's indexes climbed on Wednesday, with the S&P 500 reaching an intraday record high as investors reacted positively to Netflix's quarterly report and President Trump's plan for private-sector AI infrastructure investment.
Dow Jones closed up by 0.30 percent, S&P 500 closed up by 0.61percent, Nasdaq settled up by 1.28 percent.
Commodities Recap
Gold prices surged to near three-month highs on Wednesday, driven by a weaker dollar and uncertainty around Trump's policy plans, which raised concerns about trade wars and market volatility.
Spot gold added 0.4% to $2,755.2 per ounce as of 02:29 p.m. ET (1629 GMT). Prices were at their highest since Oct. 31 when they hit their all-time high of $2,790.15.U.S. gold futures settled 0.4% higher at $2,770.90.
Oil prices dropped to a one-week low on Wednesday as the market weighed the potential impact of U.S. President Donald Trump's proposed tariffs on global economic growth and energy demand.
Brent futures fell 29 cents, or 0.4%, to settle at $79.00 a barrel, while U.S. West Texas Intermediate crude (WTI) traded 39 cents, or 0.5%, lower to settle at $75.44.