FOREX TODAY: EXPECT INCREASED VOLATILITY DUE TO PMI DATA AND BOC POLICY ANNOUNCEMENTS

What you need know on Wednesday, January 24 is as follows:

Early on Wednesday, financial markets are comparatively quiet after Tuesday's erratic trading. Later in the day, S&P Global will release the Manufacturing and Services PMI data for the US, Germany, the Euro region, and the UK. The Bank of Canada (BoC) will make monetary policy announcements during American market hours. Early on Tuesday, there was bearish pressure on the US dollar, as the USD Index (DXY) dropped below 103.00 during the European session for the first time in a week. DXY gained momentum in the second part of the day due to Wall Street's bearish opening. Nonetheless, a late-day surge in technology companies curtailed the USD's gains. Early on Wednesday, US stock index futures are trading slightly higher for the day while the benchmark 10-year US Treasury still hovering above 4%.

US dollar exchange rate for this week

The US dollar's (USD) percentage movement compared to a list of major currencies for this week is displayed in the table below. When compared to the Australian dollar, the US dollar was the strongest.

The heat map shows the percentage fluctuations of the major currencies in relation to each other. The left column, and the quotation currency is chosen from the top row. For instance, if you choose the Euro in the left column and go down the horizontal line to the Japanese Yen, the percentage change displayed in the box will be EUR (base)/JPY (quote).

It is widely expected that the BoC would keep its policy rate at 5% following the January policy meeting. Governor Tiff Macklem will answer questions and make observations about the policy outlook at a press conference that starts at 15:30 GMT. Following the Monday surge, USD/CAD encountered resistance at about 1.3500 and fell by Tuesday's conclusion. The pair is still stable at around 1.3450 in the European morning.

EUR/USD climbed above 1.0900 during Tuesday's European session, but it then veered off course and dropped to around 1.0820, its lowest point in over a month. The technical correction throughout Asian trading hours, and at the end it was observed fluctuating within a narrow band above 1.0850.

After approaching 1.2750 almost exactly, GBP/USD headed south and saw slight losses on Tuesday. On Wednesday morning, the pair remains over 1.2700.

According to Australian data, the Judo Bank Composite PMI increased from 46.9 in December to 48.1 in January. This data AUD/USD, which was sideways below 0.6600.

After increasing by 5.6% in the previous quarter, the New Zealand Consumer Price Index increased by 4.7% annually in the fourth quarter. This reading was in line with market expectations and did not elicit any discernible response. NZD/USD was essentially flat on the day at 0.6100 as of the time of publication.

After a steep fall during Tuesday's early European session, USD/JPY turned positive and recovered all of its daily losses. The pair lost ground early on Wednesday and was unable to maintain its bullish momentum.

On Tuesday, Gold was unable to make a clear move in either direction for the fourth straight trading day. XAU/USD is still moving up and down in a small area above $2,020 in the morning hours of Europe.