The U.S. Dollar is trading in tight ranges as markets enter mid-week still awaiting for tomorrow’s big headline inflation gauges.
Overview
Along with consumer Price Index numbers for December, we will get to see how suppliers fared during a crucial time for holiday activity. As with recent price growth data, tomorrow is expected to mark another 2-year milestone for disinflation. If the story is different, prepare to see strong movement for the Buck either way.
The Federal Reserve has a few people commenting this week, but nothing exciting has been said that has not been explained incessantly since their last meeting. The economy is resilient, if not “hot” already, and although markets desire and plan for lower borrowing costs, they may have to curb their enthusiasm some. In other news related to the circulation of funds, Bitcoin and other crypto may face some headwinds after the Security and Exchange Commission denied approving spot-Bitcoin Exchange Traded Funds.
What to Watch Today…
- U.S. CPI & PPI Thursday 8:30 AM
- Industrial Production U.K. Friday
- Monex USA Online is always open.
EUR ⇑
The Euro is also in familiar levels without a ton to bite on until next week with a plethora of data released mid-month. Everything from inflation to Purchasing Managers Index will give us some cues over the future of European Central Bank policy. ECB Executive Board member Isabel Schnabel, who spoke of no more hikes back in interviews last month, explained over a Q&A that indeed the ECB is more likely to be doing cuts this year than not. One cannot blame her foreseeing it as all member nations seem stagnant if not already in a recession. Euro will go up some more in value this year, but only if their progress is part of the larger global growth narrative.
GBP ⇑
Sterling is also quiet, but could see a bit of a swing if anything surprising comes out of some testimony today. At the time of writing, Bank of England Governor Andrew Bailey was responding to some question by the U.K. Parliament’s Treasury Committee. Per expectations, the BOE is forecast to cut into interest rates possibly five times this year. Bailey will likely just reassure legislators that all tools will be considered to help keep inflation down. His line has been one of dissuading market bets on a very dovish BOE in 2024.
