The US dollar rose to the top of the forex heap on the first day of trading in 2025 as broader markets maintain a firm footing in the safe-haven currency. Traders may not be the biggest fans of the US dollar in terms of politics, but the US dollar is still the de facto winner by default amid a global backdrop of volatile economic conditions.
Here’s what you need to know before Friday, January 3
The US Dollar Index (DXY) rose strongly to mark the start of the 2025 trading season, rising by about eight-tenths of one percent and reaching the 109.50 level for the first time since November 2022. The only meaningful data of note on Friday’s economic calendar is the results of the manufacturing PMI survey ( PMI) issued by the US ISM, which is expected to remain steady at a contractionary level of 48.4 for the month of December. A better than expected reading in weekly initial jobless claims in the US also helped provide overall support flows into the US dollar.
The EUR/USD pair actually fell more than 1% in January, falling to 1.0250 and sliding to two-year lows on the first trading day of the new year. Hopes for the euro remain tepid and investors widely expect the interest rate differential between the euro and the US dollar to continue to increase through the first half of 2025. Mid-level German unemployment figures are due early on Friday.
The GBP/USD pair stumbled on Thursday, falling 1.15% on the day and clearly breaching the 1.2400 level, hitting a nine-month low in the process. The pound is set to play second fiddle to other more important market-moving figures with the UK largely absent from the economic calendar over the coming week.
The AUD/USD pair continues to hold at the lower bound as price action grapples with the 0.6200 area as the new trading year begins. The Australian dollar was looking for a technical recovery during the day, but broad market flows into the US dollar kept the AUD/USD pair near 27-month lows.
The USD/JPY pair is heading towards familiar highs near 158.00 after an intraday rebound on Thursday. The USD/JPY pair initially opened 2025 trading with a downward push, but strong bidding strength for the US dollar from across the broader market helped reverse course and keep USD/JPY near six-month highs.
Economic indicator
Initial unemployment claims
The U.S. Department of Labor’s initial unemployment claims are a measure of the number of people filing first-time claims for state unemployment insurance. A higher than expected number indicates weakness in the US labor market, reflects negatively on the US economy, and is negative for the US dollar. On the other hand, a decreasing number should be considered as an upward trend for the US dollar.
Read more.
Latest version: Thursday 02 January 2025 at 13:30
repetition: weekly
actual: 211 k
consensus: 222 thousand
former: 219 thousand
source: US Department of Labor
Source: https://www.fxstreet.com/news/forex-today-markets-kick-off-new-trading-year-with-a-fresh-bid-in-the-greenback-202501021959