- The US Dollar is set to post its sixth weekly gain as Federal Reserve officials continue to push back on interest rate cuts this year and on resilient US activity gauges. Many policymakers still forecast less cuts than what the market is currently pricing (at least 5 cuts by the end of January 2025). Fed’s Bank of Richmond President, Thomas Barkin, stated that policymakers have time to weigh the timing of rate cuts, pointing to a strong jobs market and continued disinflation.
- The euro is gaining this morning but is consolidating under 1.08 as investors prepare for the final print of Germany’s CPI for January. CPI MoM is estimated at 0.2% (vs. 0.2% prior) and CPI YoY at 2.9% (vs. prior 2.9%). The momentum remains bearish for the pair, and the next support is seen at 1.0724 followed by 1.0655.
- Quiet day for the sterling but it edges higher against the greenback, holding above 1.26 at 1.2628. We flirted under the key level at 1.26 yesterday but got stopped near 1.2565 (200D MA) and we are now back trading on the 1.26-1.28 range (again!), where the pair has been stuck since early December 2023.
Around the world 🌎
- NZD/USD advanced 0.5% to trade above 0.61, hitting a 1-week high after the ANZ Bank said it expects to hike interest rates at least twice this year.
- AUD/USD is little changed today, continuing to trade near the 0.65 level.
- USD/JPY trades mid 149-149.50.
