Nonfarm payrolls in the United States surged by 256,000 in December, surpassing market expectations and providing a positive signal for the economy. Meanwhile, the unemployment rate dipped to 4.1%, reflecting a tightening labor market. These developments come as annual US Consumer Price Index (CPI) is projected to rise slightly from 2.7% to 2.8% in December, underscoring the ongoing challenges faced by the Federal Reserve in aligning inflation with its 2.0% target.
In response to these economic indicators, markets are adjusting expectations for future interest rate cuts, particularly for 2025. While the Federal Reserve grapples with inflationary pressures, Chinese authorities are contending with deflation and sluggish growth. Despite these challenges, projections indicate China's GDP growth may climb to 5.0% year-over-year in the fourth quarter, up from 4.6% in the third quarter.
In currency markets, the USDJPY pair has remained relatively stable over the past month, yet it achieved a new six-month high of 158.86 on Friday. The currency's strength highlights investor sentiment amidst global economic uncertainties. However, potential bearish movements could be mitigated by the 50-day Simple Moving Average (SMA) at 154.35 and a medium-term uptrend line, which may serve as potential support levels.
Conversely, the GBPUSD experienced a significant decline, reaching a fresh 15-month low earlier today. This marks the fifth consecutive day of losses for the currency pair. Analysts suggest that key support levels at 1.2070 and 1.1840 could potentially pause further bearish actions, offering some respite to traders.
Meanwhile, the AUDUSD has seen a slight uptick from its nearly five-year low of 0.6130, reflecting cautious optimism among investors regarding economic recovery prospects.