The U.S. Dollar is not moving much this morning, sticking to levels seen yesterday, with the Japanese Yen being the sole exception.
Overview
Indeed, it looks almost as if our tickers were malfunctioning with the low volatility being displayed across FX markets. As mentioned in previous write-ups, markets seem fascinated with the possibilities that AI may offer and are jumping on just a few companies leading the way. Much of the excitement is now being scrutinized as well thus most headlines focused on equities.
Data released this morning showed January had increased wages, with Personal Income up by 1.0% over the 0.4% increase expected, while Spending met its 0.2% estimate. Personal Consumption Expenditures Core Deflator climbed 0.3% in January, while the month prior’s figures were revised downward from 0.2% to 0.1%. This meant a drop in the annual average, which now stands at 2.8% from 2.9%. The Buck has not seen much of an effect from these indicators, but a vast amount of numbers are still being digested from other regions of the globe. We shall see if any surprises make way for a more exciting March.
What to Watch Today…
EUR ⇑
The Euro has been muted for the most part but is looking to pivot upward after surprises in data following some national releases overnight. France’s numbers were the highlight as the Consumer Price Index rose more than expected, but more importantly, the nation registered unexpected growth, with GDP in the fourth quarter revised to 0.1% instead of being flat or contracting like other Euro-zone members. On the other hand, German indicators primarily revealed an increase in unemployment explained by an anemic economy where producers are simply hiring less and less. Euro-zone Manufacturing PMIs and the area’s CPI will be out tomorrow.
JPY ⇑
The Japanese Yen is up by over half a percent as the only interesting mover in the FX realm. Sounding a tune that has been played ever since last Summer, a board member of the Bank of Japan suggested that officials are coming closer to agreeing on bringing interest rates from negative territory. Explaining that the price target is “coming into sight,” BOJ’s Hajime Takata sparked renewed hopes that the Japanese markets will deliver as investors and traders look for a wish to come true. Japan has seen its stocks rise, but investors also want some yield or safety from losses in keeping high Yen reserves.
