Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
AI buzz fuels US stocks to fresh peaks
The S&P 500 scaled new heights above 6100 as tech stocks extended their rally, powered by enthusiasm over Trump’s Stargate venture announcement and ongoing AI optimism. The index pulled back slightly to close at 6086, though the broader upward momentum remained intact.
The tech-heavy Nasdaq Composite broke above 20000 despite higher Treasury yields, with info tech stocks surging as much as 2.5%.
The dollar retreated in early trading before finding mild support as EURUSD pulled back from 1.0450 to 1.0410.
The DXY managed to climb back above 108 after slipping below this around NY open.
In the EM space, USDCNH failed to break below 7.2600 for a second consecutive session, settling at 7.2830 as markets await specifics on Trump’s China tariff plans. In Asia today, Singapore CPI data is due, which could influence the MAS decision on January 24.
Consumer confidence to drive GBP
This Friday will see the publication of UK consumer confidence data.
Despite Trump’s win in November and the UK budget release in October, confidence has been modestly increasing in recent months.
More policy clarity, even if it means higher domestic taxes and US tariffs, may serve as the foundation for some of the progress.
Confidence was still below its long-term pre-pandemic norm of -9 in December, at -17.
Short term, GBP/USD has edged up during the last 4 trading sessions. Next key resistance for GBP/USD to overcome is at 1.2528 handle.
Medium term, GBP/USD downtrend looks set to continue.
US consumer mood tests key level
This Saturday will see the publication of the University of Michigan Consumer Sentiment.
Consumer sentiment at the University of Michigan probably decreased slightly to 73.0 from 73.2 in the final print.
During the survey reference period, fuel costs increased while stock prices decreased. Due to consumers’ anticipation of future price increases, purchasing plans probably kept getting better.
Amid increased trade threats, long-term inflation expectations surged to 3.3% in the preliminary print, the highest level since June 2008.
If this measure continues to rise, there may be worries about higher-for-longer inflation.
Aussie edges up steadily
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 20 – 25 January
All times AEDT
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
