EUR/USD 1.17048
-0.140%
Gold 4469.55
0.460%
Oil 58.398
0.397%
USD/JPY 156.402
0.003%
GBP/USD 1.35106
-0.231%
GBP/JPY 211.314
-0.221%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
January 6th - The larger-than-expected slowdown in German inflation at the end of last year has not provided sufficient reason for the European Central Bank (ECB) to change its current policy path. The German Federal Statistical Office reported on Tuesday that the Consumer Price Index (CPI) rose 2% year-on-year in December, following a 2.6% increase last month. The median forecast in the survey was 2.2%. This comes after earlier reports from France and data from Spain last week, both indicating easing price pressures. Eurozone data will be released on Wednesday, with economists predicting inflation will be at the 2% target level. Policymakers have expressed confidence that inflation is back under control. Although the ECBs latest forecasts show that price increases this year and next will be below target, the extent of this shortfall is minimal – sticky inflation in the services sector remains a cause for concern. Executive Board member Schnabel stated that unless any shocks occur, borrowing costs "are likely to remain stable for a considerable period."January 6th - JPMorgan Chases US Treasury client survey showed that as of the week ending January 5th, the proportion of long positions decreased by 11 percentage points, short positions increased by 6 percentage points, and neutral positions increased by 5 percentage points. All client surveys showed that net long positions and the proportion of long positions both reached their lowest levels since October 2024.Germanys preliminary harmonized CPI monthly rate for December was 0.2%, below the expected 0.4% and the previous reading of -0.50%.Germanys preliminary December CPI annual rate was 1.8%, below the expected 2.1% and the previous value of 2.30%.Germanys preliminary December CPI month-on-month rate was 0%, compared to an expected 0.3% and a previous reading of -0.20%.

US Dollar Index Recovers From Weekly Low Due To Weak US Inflation And Hawkish Federal Reserve Bets

Daniel Rogers

Feb 15, 2023 14:41

US Dollar Index.png 

 

During early Wednesday trade, the US Dollar Index (DXY) maintains a defensive stance at 103.30, following a comeback from a one-week low, as dollar bulls await fresh evidence to reverse a two-day decline.

 

US inflation numbers initially failed to excite US Dollar bulls, forcing the dollar's index against six major currencies to drop to its lowest level in a week the previous day. The US Treasury bond yield and the DXY, however, were later buoyed by the Fed's hawkish remarks.

 

The US Consumer Price Index (CPI) exceeded market expectations with a 6.4% year-over-year (YoY) increase, although it was the worst YoY growth since 2021, when it fell below 6.5%. Importantly, the CPI excluding food and energy, often known as the Core CPI, rose by 5.6% compared to market forecasts of 5.5% and prior readings of 5.5%.

 

In spite of the fact that the United States inflation failed to meet expectations for a "pleasant surprise," the majority of Federal Reserve (Fed) policymakers supported more rate hikes after reviewing the data. The yields on US Treasury bonds and the US Dollar were driven by the same factor. Lorie Logan, president of the Dallas Fed, highlighted, however, that they must be prepared to continue rate hikes for a longer period of time than initially anticipated. John Williams, president of the New York Federal Reserve Bank, reiterated this attitude, noting that the task of containing high inflation is not yet accomplished. In addition, the president of the Federal Reserve Bank of Philadelphia, Patrick Harker, stated that they are not yet through (increasing interest rates), but are likely close.

 

As a result, US 10-year Treasury bond rates vary around 3.75%, up three basis points (bps) after reaching a six-week high, while the two-year equivalent reached its highest level since early November 2022 by reaching 4.60%. Similarly, Wall Street's losses towards the conclusion of the day boosted the DXY's increase.

 

US Retail Sales and Industrial Production data for January, as well as the NY Empire State Manufacturing Index for February, should be closely monitored by traders of the US Dollar Index on Wednesday in order to validate the Fed's hawkish lean and continue the recovery's momentum.


Suggestion