EUROPEAN FX UPDATE: USD starts 2025 on a softer footing alongside light newsflow

DXY: DXY -0.1%; 108.43

• The USD has kicked 2025 off on a modestly weaker footing vs. most peers with newsflow relatively light around the US ahead of tomorrow's House speaker vote; Trump has endorsed Mike Johnson for another term. In the interim, today will see the release of weekly claims data and the final release of S&P manufacturing PMI data. DXY remains on a 108 handle and was granted some mild reprieve following a pullback in European stocks. DXY currently sits towards the top end of the 31st December range of 107.86-108.58.

EUR: EUR/USD +0.1%; 1.0355

• EUR a touch firmer vs. the USD with fresh macro drivers from the Eurozone on the light side aside from a minor downward revision to December's EZ manufacturing data and recent comments from ECB President Lagarde who noted that the Bank aims to hit its inflation target this year. Focus for EUR/USD primarily lies to the downside with attention on the 31st December low @ 1.0343, 20th December low @ 1.0342 and the 22nd November/2024 low @ 1.0331.

JPY: USD/JPY U/C; 156.80

• JPY flat vs. the USD after USD/JPY slipped below 157 in early European trade with no clear driver behind the move and Japanese markets closed overnight. For now, the pair is contained within the 31st December range of 156.01-157.54 with potential interim resistance coming via the 21DMA @ 157.16.

GBP: GBP/USD -0.2%; 1.2495

• GBP lagging vs. the USD in quiet trade with not much in the way of fresh fundamentals for the UK aside from a downward revision to the UK December PMI print. Cable has delved as low as 1.2487 with the next target coming via the December 2024 low @ 1.2474 and the May 2024 low @ 1.2446.

Antipodeans: AUD/USD +0.3%; 0.6210. NZD/USD +0.3%; 0.5613.

• Both firmer vs. the USD and top of the G10 leaderboard with no follow-through from disappointing Chinese manufacturing PMI data overnight. AUD/USD is currently caged within the Dec 31st range of 0.6189-0.6231; the lower bound of which was the 2024 low. NZD/USD is also within the 31st December range at 0.5587-0.5646.

02 Jan 2025 - 09:55- ForexData- Source: Newsquawk