The US dollar is exhibiting a stronger position today relative to the majority of G10 currencies. The prevailing consolidative/corrective tone persists. The outcomes of the meetings held by the European Central Bank and the Bank of England are currently anticipated. Neither central bank is expected to take action, which enhances the influence of the commentary. The threshold for another ECB rate cut appears elevated, despite headline inflation being below the target level. The Bank of England is expected to implement at least one rate cut this year, although it may prefer to keep the market from getting too far ahead of its decisions. Equities and bonds are exhibiting a more pronounced downward trend. Tomorrow’s US jobs report has been delayed until next week; however, following the ECB and BOE meetings, focus will remain on the US jobs market. Challenger job cuts, weekly initial jobless claims, and December JOLTS reports are forthcoming. The central bank of Mexico is scheduled to convene later in the session. An extended pause is understood to be in effect, potentially lasting until midyear.

The euro reached a peak yesterday during the early European trading session, approaching $1.1840, with 3.5 billion euro options at $1.1850 expiring yesterday. It reached a sale price of nearly $1.1790 shortly before noon in New York, and has since adjusted to $1.1780 today. Monday’s low, marking the lowest point since January 23, was approximately $1.1775. Options totaling nearly 2.9 billion euros have been established at a strike price of $1.18, set to expire today. The euro must breach the $1.1760-65 range to indicate the forthcoming downward movement. The apprehension regarding substantial measures to bolster the yen has diminished. The dollar climbed to JPY156.85 yesterday, continuing its rebound from last week’s low around JPY152.10. Today’s follow-through buying propelled it to nearly JPY157.35. Options valued at approximately $790 million in the JPY157 range are set to expire tomorrow. Proximity to resistance could be observed near JPY157.50.

Sterling fluctuated around Tuesday’s range yesterday but did not manage to close below its low near $1.3650. Today, it declined to approximately $1.3555, marking a nine-session low that disrupted the 20-day moving average. The subsequent support level could potentially be around the $1.3535 region. The Canadian dollar exhibited a largely stable performance yesterday; however, it appears to be at risk. The US dollar established a strong position near session highs yesterday, hovering around CAD1.3680-5. A move above CAD1.3700 is being monitored, as it was tested during European trading, to indicate potential gains toward the CAD1.3755-60 range. Approximately $650 million in options are set at CAD1.3700, with expiration scheduled for tomorrow.

The Australian dollar experienced significant trading activity yesterday, remaining within the range established on Tuesday (~$0.6945-$0.7050). It continues to stay within that range today, having reached $0.6960. The potential for further downside correction appears likely. Monday’s low was approximately $0.6910. The subsequent technical target is approximately $0.6880. A breach of this level may indicate the forthcoming half-cent drop.