• Gold down $18 to $2040
  • WTI crude oil up $2.60 to $72.98
  • US 10-year yields down 2.4 bps to 3.92%
  • S&P 500 down 38 points, or 0.8%, to 4704
  • GBP leads, JPY lags

Early in the year it's always tough to tie market moves to fundamentals. The US economic data was on the 'goldilocks' side, neither too hot nor too cold. But after the releases, the dollar rallied of the day, helped along by US 10s rising above 4%. However later in the day, yields and the dollar tracked lower. The FOMC minutes briefly interrupted that move and even a soft finish to equities couldn't change the trajectory.

EUR/USD steadily declined to 1.0894 before rebounding by 25 pips late in the day, roughly halving the day's decline.

The big move was in USD/JPY as it continued to erase the drop from late in the year. The pair is back to Dec 13 levels now, having rallied strongly to start the year. However the gains were also pared by 50 pips late in the day as yields fell.

Cable was the top performer but it came on the heels of yesterday's rout, with the 50 pips rally today only denting the previous decline.

AUD was the laggard among the commodity currencies but they were all soft despite a pop in oil on Libya's production shutdown, the bombing attack in Iran and the ongoing Red Sea shutdowns. Oil is now up about $1 from the final trade of 2023.

FX news wrap Jan 3