Forex Today: US Dollar regains ground, eyes on US Retail Sales, PPI data

Here is what you need to know on Wednesday, January 14:

The US Dollar (USD) recovers some lost ground against its major counterparts on Wednesday, bolstered by US Consumer Price Index (CPI) inflation data that firms up ‌expectations that the Federal Reserve (Fed) will remain on hold later this month. 

Following the recent US CPI inflation data for December, Fed funds futures traders' pricing showed that an interest rate cut is not seen as likely until June. 

Traders will keep an eye on the release of the US Retail Sales and Producer Price Index (PPI) reports later on Wednesday. The US Retail Sales are expected to see an increase of 0.4% MoM in November. Meanwhile, the headline and core PPI are estimated to see a rise of 2.7% YoY in November. 

Unprecedented pressure from the White House to lower interest rates raises concerns over the Fed’s independence. Fed Chair Jerome Powell said on Sunday that the Fed has received subpoenas from the Justice Department over statements he made to Congress last summer on cost overruns for a $2.5 billion building renovation project at the central bank's headquarters in Washington. Powell called the threats a "pretext" for putting pressure on the US central bank to cut the interest rates.

Traders will closely monitor the latest geopolitical developments surrounding the Iranian civil unrest. US President Donald Trump canceled all meetings with Iranian officials and promised protesters that help is on the way. Trump has frequently threatened to intervene if the Iranian government kills protestors.

AUD/USD attracts some buyers near 0.6700 amid hawkish expectations surrounding the Reserve Bank of Australia’s (RBA) rate outlook. Additionally, China posted a trade surplus of $114.10B in December, defying the renewed tariff pressures from Trump. China’s Exports grew by 6.6% in value terms year-on-year in December, beating the market expectations of a 3% increase.

USD/JPY rises to the highest levels since July 2024, around 159.30, on reports that Japanese Prime Minister Sanae Takaichi may call a snap election on February 8 to consolidate her power. Bank of Japan (BoJ) Governor Ueda said on Wednesday that the central bank will continue to raise interest rates if economic and price development are in line with the forecast, and wages and prices rise moderately. 

EUR/USD trades on a flat note below 1.1650 amid a data-empty European calendar, while GBP/USD holds steady around 1.3435. Traders brace for the UK Gross Domestic Product (GDP) report for November, which is due on Thursday. The Harmonized Index of Consumer Prices (HICP) from Germany will be published on Friday. 

Gold holds positive ground near a record high above $4,625 as traders pile into safe-haven metals amid geopolitical and economic uncertainties. Silver rises more than 3.65% to set a new all-time high of $91.57 in Wednesday’s early European session.  

WTI edges lower to $60.70 as Venezuela resumes exports and the American Petroleum Institute (API) shows a big build in US crude inventories. Heightened concerns surrounding Iran and potential supply disruptions will be closely watched.