The U.S. Dollar is trading in tight ranges this morning ahead of a major inflation printout due tomorrow.
Overview
While some officials from the Federal Reserve have already weighed in on how they believe a finalized interest rate is coming as hikes remain the preferred course of action over stopping altogether, Chairman Jerome Powell refused to confirm such thinking.It is widely believed across markets that the Fed will see it possible to stop raising rates by the end of H1, the first half of the year, but Consumer Price Index figures must match the downward trends in consumer inflationary expectations.Some technical analysts are advising that we are entering a bull market as investors and traders feel mostly positive about prospects for growth in Europe and Asia after a lackluster recovery that was only crippled by Russia’s invasion of Ukraine and the subsequent rationing of energy supplies. That may be enough to keep the buck subsided until there is reason to believe that not much will change from the flight to safety of last year.
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
Monex USA introduces OPTIONS
With currency exchange rates in a constant state of flux, companies transacting cross-border face the risk of losing substantial sums of money if they fail to hedge their exposure to these shifts. Monex USA now offers a wide range of FX options that could help your business better manage risk. Learn More
EUR ⇑
The Euro remains strong to start the year ahead of inflationary data that will determine the mood for the rest of January. Good thoughts behind the EU and a renewed sense of global competence seem to be a good recipe for Euro stability. A number of European Central Bank officials may give commentary throughout today and tomorrow, but the commentary is likely to be a dud in comparison to the reaction to CPI numbers
GBP ⇑
Sterling is currently down by less than half a percent, but there has not been anything significant trying to sink it before key CPI numbers from the U.S. Thursday. The Bank of England is expected to maintain a “dovish hike” mode as they warn of the potential for deep recession. Nevertheless, not all economic indicators are pointing at the ruin, with British Retail Consortium Retail Sales for December advanced more than expected to 6.5% from 4.1% in November. Pound gains could arrive if, indeed, there is enough evidence for markets to stay convinced that the Fed will stop raising interest rates at some point this year.
