Skip to content
Risk warning: Our products are leveraged and carry a high level of risk, which can result in the loss of your entire capital. Such products may not be suitable for all investors. It is crucial to understand the risks involved fully.
  • Support
  • For Institutionals
  • Trading

    Trading Platforms

    • MetaTrader 4 Terminal
    • MetaTrader 5 Terminal
    • PAMM Accounts
    • Equinix Trading Server

    Markets coverage

    • Forex Currencies
    • Spot Metals
    • Commodities

     

    • CFDs on Stocks
    • Indices
    • CFDs on Crypto

    Start Trading

    • Standard Accounts For individuals
    • Institutional Account For professionals
    • Deposits & Withdrawals
  • Conditions

    Trading Conditions

    • Spreads Overview
    • Swap-Free
    • Leverage Information

     

    • CFD Specifications
    • Full Trading Conditions

    Invest on your terms

    Transparent pricing, reduced trading costs, and leverage that adapts to your strategy.

    Explore conditions
  • Tools
    • Weekly Outlook
    • Daily Technical
    • Market Commentary
    • Economic Calendar
    • News & Insights
  • About
    • About OnEquity
    • Company News
    • Legal Documentation
    • Client Protection
    • Help & Support
    • FAQs
  • Partners
Edit Content
  • English
    ACTIVE
Other languages:
  • Español – Spanish
  • Português – Portuguese
  • English – International
  • Trading
    • Markets Coverage
    • MetaTrader 5 Platform
    • MetaTrader 4 Platform
    • Standard Accounts
    • Institutional Account
    • PAMM Accounts
    • Equinix Trading Server
    • Deposits & Withdrawals
  • Conditions
    • Spreads Overview
    • Leverage Information
    • Swap-Free Trading
    • CFD Specifications
    • Full Trading Conditions
  • Tools
    • Daily Technical
    • Weekly Outlook
    • Market Commentary
    • Economic Calendar
    • News & Insights
  • About
    • About OnEquity
    • Company News
    • Legal Documentation
    • Client Protection
    • Help & Support
    • FAQs
  • Partners
  • Client Portal
  • Open Account
Edit Content
  • English
    ACTIVE
Other languages:
  • Español – Spanish
  • Português – Portuguese
  • English – International
Open Account
Client Portal
Currencies, Markets

Dollar Firms Ahead of CPI Release, Pound Struggles to Regain Ground

January 13, 2025 OnEquity

The U.S. dollar strengthened on Monday, remaining at elevated levels following robust U.S. payroll data, while the British pound faced continued pressure, extending recent losses.

In early trading, the dollar index, which tracks the U.S. currency against a basket of six other currencies, was trading 0.4% higher at 109.930, after reaching its highest level on record in October 2022 on Friday.

Dollar Maintains Strength on CPI Expectations

The dollar found support from last Friday’s U.S. labor market data, which revealed unexpectedly strong job growth in December and a decline in the unemployment rate to 4.1%. This data has led traders to reassess their expectations for Federal Reserve rate cuts this year.

Markets are now pricing in 27 basis points of Fed rate cuts in 2025, compared to approximately 50 basis points at the start of the year.

“The strong U.S. jobs data released on Friday has further bolstered the U.S. dollar,” ING analysts noted in a report. “It is difficult to envision the dollar’s trend reversing this week, especially ahead of another anticipated set of robust U.S. inflation data, which could dampen expectations of Fed rate cuts.”

The U.S. Consumer Price Index (CPI) report for December, due on Wednesday, is expected to further shape rate expectations. Any upside surprises in inflation figures could reinforce the Fed’s stance, potentially closing the door on near-term rate easing.

Pound Faces Persistent Weakness

In Europe, GBP/USD fell 0.7% to 1.2117, marking 14-month lows following a 1.8% decline last week amid rising concerns over the UK’s financial outlook, which has led to increasing borrowing costs.

“Sterling continues to trade lower, and its losses could deepen this week,” ING analysts added. “Wednesday will be crucial for the pound as UK December CPI data is released. Regardless of the figure, the pound could face further pressure.”

Persistent inflation and its implications for the Bank of England’s monetary policy cycle could exacerbate issues in the UK gilt market, adding to sterling’s woes.

Meanwhile, EUR/USD edged down 0.1% to 1.0195, its lowest level since October 2022. The European Central Bank is anticipated to cut interest rates by approximately 100 basis points in 2025, with most reductions expected in the early months of the year. This outlook aligns with expectations of inflation aligning with the ECB’s 2% target by mid-year.

“With U.S. interest rates rising and the dollar performing well (+8% since the end of September), it would not be surprising if central bankers were less inclined to defend their currencies,” ING noted.

However, in a speech in Hong Kong, ECB Chief Economist Philip Lane suggested that without further rate cuts, achieving the ECB’s inflation target would be jeopardized. This indicates the ECB is not overly concerned with the euro’s softness against the dollar, even as parity discussions intensify.

Yuan Struggles for Stability

In Asia, USD/JPY fell 0.3% to 157.23 amid subdued volumes due to a Japanese holiday, while traders remain cautious ahead of the Bank of Japan’s upcoming meeting.

USD/CNY rose 0.3% to 7.3574, despite data showing that China’s trade balance grew more than expected in December, fueled by a surge in exports. However, the data largely reflected exporters rushing shipments ahead of anticipated U.S. tariffs.

President-elect Donald Trump, who will be inaugurated on January 20, has reiterated his pledge to impose steep tariffs on Chinese goods starting from the “first day” of his second term. This looming policy is expected to weigh heavily on the yuan in the near term.

  • Currencies
  • Dollar
  • Pound
  • Yuan

Post navigation

Previous
Next

Search

Categories

  • Analysis (217)
  • Beginner (24)
  • Cryptos (145)
  • Currencies (188)
  • Daily Technical (147)
  • Education (64)
  • Expert (23)
  • Intermediate (17)
  • Markets (434)
  • News & Releases (22)
  • Stocks (290)
  • Uncategorized (1)
  • Weekly Outlook (69)

Recent posts

  • Trading Hours Update – Additional Changes for August 2025
  • Today’s stocks to watch: Berkshire, Boeing, and Amazon
  • U.S. stock futures rise on heightened hopes for interest rate cuts

Tags

Analysis Bitcoin Cardano CPI Crypto Cryptocurrencies Currencies Daily Dollar earnings Education Elections ETF ETFs Ethereum Euro Fed Index inflation Litecoin Market Markets Nasdaq oil Outlook Pound Ripple SEC Solana Stablecoin Stock Market Stocks Stocks Market Stocks today Technical Technical Analysis Technology Tether Trading Trump Wall Street Weekly Weekly Outlook Yen Yuan

Related posts

Currencies, Markets

Dollar falls sharply after poor employment data; will the Fed cut rates next month?

August 4, 2025 Carlos Sereno

The U.S. dollar continued its decline on Monday, extending Friday’s sharp losses following a disappointing U.S. labor market report that bolstered expectations for early Federal Reserve rate cuts. At 04:20 ET (08:20 GMT), the U.S. Dollar Index—measuring the greenback against six major currencies—fell 0.2% to 98.722, after dropping more than 1% on Friday. Friday’s report […]

Analysis, Daily Technical

Daily Technical Analysis EUR/USD: Surge Slows at Multi-Year Highs — Tax Reform and Yields Bring Gains to a Stop

July 2, 2025 OnEquity

The EUR/USD pair remained flat during Wednesday’s session, hovering around 1.1780 after briefly touching a multi-year high of 1.1830. The euro’s advance lost steam following the U.S. Senate’s approval of President Trump’s $3.3 trillion “One Big Beautiful Bill,” which includes the entirety of his legislative agenda. The bill, passed by a 51–50 margin with Vice […]

Currencies, Markets

Dollar Drops to Multi-Year Lows, Rate Cuts, Trade Agreements, and Tax Reform in the Public Eye

July 1, 2025 OnEquity

The U.S. dollar extended its decline on Tuesday, falling to multi-year lows amid growing expectations of Federal Reserve rate cuts and rising fiscal concerns sparked by President Donald Trump’s spending bill. By 04:25 ET (08:25 GMT), the U.S. Dollar Index—measuring the greenback against a basket of six major currencies—was down 0.2% at 96.275, marking its […]

  • Privacy policy
  • Client agreement
  • Legal
  • Support
  • +2484671965
  • [email protected]
  • Chat with us
Company
  • About us
  • Regulation
  • Safety of funds
  • Company news
  • Insights
  • FAQ
Account options
  • Standard accounts
  • Institutional account
  • PAMM accounts
  • Swap-free account
Conditions
  • Spreads overview
  • Leverage tiers
  • CFD specifications
  • Markets coverage
Trading tools
  • MetaTrader 5
  • MetaTrader 4
  • Equinix trading server
  • Economic calendar
  • Daily technical
  • Weekly outlook
  • Market commentary
OnEquity Ltd is incorporated in Seychelles as a Securities Dealer with License No. SD154, authorized by the Seychelles Financial Services Authority (FSA), adhering to the Consolidated Securities Act, 2007. Registration No. 810588-1.

The website is operated and provides content by the OnEquity group of companies, which include:

OnEquity SA (Pty) Ltd, incorporated in South Africa, Company reg. 2021/321834/07, regulated by the Financial Sector Conduct Authority (FSCA) with FSP No. 53187.

OnEquity LLC, recognized by the Registrar of International Business Companies and the Financial Services Authority in St. Vincent and the Grenadines, Registration No. 286 LLC 2020.

ONEQ Global Ltd, registered in Cyprus, Company reg. HE 435383, located at Agias Zonis 22, Limassol, focusing on comprehensive service solutions within the OnEquity Group.
Risk Disclosure: Trading in financial instruments involves substantial risk and may not be suitable for all investors. The value of investments is volatile and can result in total loss of capital. Investors should consider their financial situation, investment experience, and risk tolerance, and may seek professional advice. Past performance is not indicative of future results.

Eligibility: Services are available to individuals 18 years or older.

Restricted Jurisdictions: The content provided by OnEquity is not intended for residents of the United States, Canada, North Korea, Yemen, Iran, Belgium, Syria, or any jurisdiction where such distribution or use would be contrary to local law or regulation.

All trademarks™ and brand names belong to their respective owners and are used here for identification purposes only. Use of these names does not imply endorsement.
© OnEquity. All Rights Reserved.