Forex Today: The focus remains on sentiment

What you need to take care of on Friday, January 20:

The US Dollar lost some ground on Thursday, as the dismal mood that ruled financial markets eased as the day went by. Still, most European and American indexes closed in the red, as hawkish comments from ECB and US Federal Reserve officials suggested central banks are far from done with quantitative tightening.

On Thursday, Klaas Knot, a member of the Governing Council of the European Central Bank, said that there would be more than one 50 basis points (bps) increase in interest rates, adding that market participants may be underestimating the ECB's commitment to tame prices. Later, President Christine Lagarde, noted that the central bank will stay on course with rate hikes, adding that the job market in Europe has never been as vibrant as now. More relevantly, she said that they are not seeing inflation expectations unanchoring. EUR/USD kept seesawing around 1.0800, ending the day at 1.0820.

The GBP/USD pair gained upward traction ahead of the daily close and approached the 1.2400 figure, AUD/USD recovered the 0.6900 level following a slump to 0.6871, as poor Australian employment and inflation figures weighed on the AUD.  USD/CAD retreated and trades at around 1.3450. Finally, USD/JPY spent the day consolidating at around 128.50.

Gold soared in a risk-averse environment, with the bright metal trading around $1,930 a troy ounce. Crude oil picked up and WTI settled at $80.65 a barrel.