Home Forex Strong data, rate cut bets boost dollar (again)

Strong data, rate cut bets boost dollar (again)

by SuperiorInvest


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Another positive set of results in key US indicators lent oxygen to the dollar’s upward bias and supported a tighter, longer narrative around the Fed. The same view appears to be emerging around the ECB, where the December event left no room for any guesswork on the timing of interest rate cuts.

Here’s what you need to know on Friday, January 19:

Another positive session for the dollar allowed the USD index (DXY) to move at the upper end of the recent range in the 103.60 region on modest gains, while favorable prints from regional manufacturing surveys and corporate data from the weekly labor market contributed to bearish sentiment. around the March Fed rate cut. On Friday, Michigan’s preliminary consumer sentiment indicator will take center stage in US papers, along with existing home sales, TIC Flows and FOMC speeches by M. Daly (San Francisco) and M. Barr (Board of Governors).

EUR/USD remained on the defensive and again flirted with mid-year lows in the 1.08,000s on the back of dollar strength, despite the fact that the ECB accounts made no mention of a rate cut. The publication of data in euros is missing calendar on Friday, all attention is expected to be on President C. Lagarde’s next speech at the WEF in Davos.

GBP/USD briefly breached the 1.2700 mark and ended Thursday’s session with decent gains despite another positive session in the dollar. Investors across the channel are expected to closely watch the retail sales release for the month of December on Friday.

USD/JPY had a volatile session on Thursday, ending the day around 148.00 after hitting multi-week highs near 148.50 on Wednesday. On Friday, all attention should be focused on the publication of December inflation data, followed by the November tertiary industry index.

AUD/USD woke up and rose to the 0.6570 area, although it remained locked in a multi-week bearish move in place since late December. Australian dollar it continued to suffer from buying pressure in the dollar, dismal domestic labor data, fragile Chinese fundamentals and a lack of positive momentum in the commodity universe. There are no dates scheduled for Down Under at the end of the week.

Both gold and silver managed to regain some balance on Thursday and chart modest gains, partially escaping recent weakness.

Geopolitical concerns and a weekly draw in U.S. crude inventories encouraged WTI prices to add to the previous day’s gains and break above $74.00 a barrel. So far, oil has maintained a consolidation theme since the beginning of the year.

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