Here’s what you need to know on Friday, February 20:
According to the United States Department of Labor, the number of United States (US) citizens who filed fresh claims for unemployment insurance dropped to 206,000, significantly lower than the initial estimate of 225,000. and less compared to the adjusted 229 thousand from last week.
Attention now turns to U.S. data released on Friday, including the Personal Consumption Expenditures (PCE) price index, preliminary U.S. gross domestic product (GDP) estimates for the fourth quarter, and preliminary Purchasing Managers’ Index (PMI) data for February.
The US dollar index (DXY) is near a four-week high of 97.90, supported by better-than-expected results from weekly US labor market data. Investors continue to digest Wednesday’s release of the FOMC meeting minutes, which showed the committee remains quite divided.
Today’s US dollar price
The table below shows the current percentage change of the United States Dollar (USD) against the major listed currencies. The US dollar was strongest against the Swiss franc.
| USD | EUR | GBP | JPY | BOOR | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.17% | 0.36% | 0.16% | 0.05% | -0.06% | 0.00% | 0.37% | |
| EUR | -0.17% | 0.19% | -0.04% | -0.14% | -0.23% | -0.16% | 0.21% | |
| GBP | -0.36% | -0.19% | -0.21% | -0.31% | -0.42% | -0.35% | 0.01% | |
| JPY | -0.16% | 0.04% | 0.21% | -0.12% | -0.22% | -0.18% | 0.20% | |
| BOOR | -0.05% | 0.14% | 0.31% | 0.12% | -0.10% | -0.05% | 0.32% | |
| AUD | 0.06% | 0.23% | 0.42% | 0.22% | 0.10% | 0.07% | 0.44% | |
| NZD | -0.00% | 0.16% | 0.35% | 0.18% | 0.05% | -0.07% | 0.37% | |
| CHF | -0.37% | -0.21% | -0.01% | -0.20% | -0.32% | -0.44% | -0.37% |
The heat map shows the percentage changes of the major currencies relative to each other. The base currency is selected from the left column and the quote currency from the top row. For example, if you select the US dollar from the left column and move along the horizontal line to the Japanese yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD is trading near the 1.1770 level after markets digested the news that European Central Bank (ECB) President Christine Lagarde may step down earlier than her planned retirement in October 2027.
GBP/USD is trading near the 1.3460 price area under pressure from cooling inflation in the UK and labor market conditions, which have had a robust impact on the British currency.
USD/JPY is trading near the 154.90 price area, recovering almost half of yesterday’s losses after solid US economic data and a hawkish tone from the Federal Open Market Committee (FOMC) minutes.
AUD/USD is trading near the 0.7050 price zone, losing all momentum after hitting a three-year high last week.
USD/CAD is trading near the 1.3700 level, maintaining weekly gains on the Bank of Canada’s (BoC) dovish stance, while inflation pressures remain close to the central bank’s 2% target.
Gold is trading at $4,982, seeing little change on the day as geopolitical tensions ease.
What’s next on the docket:
Friday, February 20:
- UK retail sales in January.
- Germany February preliminary HCOB Composite PMIs.
- Euro zone PMIs.
- UK preliminary results from February S&P Global PMI.
- Basic personal consumption spending in December in the US.
- February global PMI indices of the American agency S&P.
Gold FAQs
Gold has played a key role in human history as it has been widely used as a store of value and a medium of exchange. Nowadays, beyond its luster and operate in jewelry, the precious metal is widely viewed as a safe-haven asset, meaning it is considered a good investment in turbulent times. Gold is also widely seen as a hedge against inflation and currency depreciation because it is not tied to any particular issuer or government.
Central banks are the largest holders of gold. To support their currencies in turbulent times, central banks typically diversify their reserves and purchase gold to improve the perceived strength of the economy and currency. High gold reserves may provide a source of confidence in the country’s solvency. According to data from the World Gold Council, central banks added 1,136 tons of gold to their reserves in 2022, worth about $70 billion. This is the highest annual purchase since registration began. Central banks in emerging economies such as China, India and Turkey are rapidly increasing their gold reserves.
Gold has an inverse correlation with the US dollar and US treasury bonds, which are both major reserve assets and sheltered haven assets. When the dollar depreciates, gold tends to rise, allowing investors and central banks to diversify their holdings in turbulent times. Gold is also inversely correlated with risky assets. A rally in the stock market tends to weaken the price of gold, while sell-offs in riskier markets favor the precious metal.
The price may change due to many factors. Geopolitical instability or fear of a deep recession can quickly cause gold prices to rise due to its safe-haven status. Gold, as a non-yielding asset, tends to rise at lower interest rates, while the higher cost of money tends to weigh on the yellow metal. Still, most of the movements depend on the behavior of the US dollar (USD) when the asset is priced in dollars (XAU/USD). A robust dollar tends to keep the gold price in check, while a weaker dollar will likely cause gold prices to rise.
