U.S. CPI Readings Dominate Currency Market Movements

RTTNews | vor 875 Tagen
U.S. CPI Readings Dominate Currency Market Movements

(RTTNews) - Dull jobs data from the U.S. that diminished lingering fears of a hawkish Fed and triggered the Dollar's retreat set the context for currency markets in the past week spanning January 9 to 13. Less-than-expected growth in wages as well as a multi-month low in non-farm payrolls added, instilled a sense of relief that the Fed would not have sufficient headroom to continue to be aggressive on its monetary policy tightening.

As the week progressed, expectations of a decisive drop in inflation that the Fed could comfortably take cognizance of, got further reinforced. Tuesday's speech by Fed Chair Jerome Powell that made no mention of the Fed's likely moves on interest rates also supported the relief rally in risk assets.

On Thursday, as expected, the headline CPI for December cooled to 6.5 percent from 7.1 percent in November while core inflation declined to 5.7 percent, from 6 percent in the previous month. CPI has been declining steadily from 9.1 percent in June 2022 to 7.7 percent by October and 7.1 percent by November.

The Dollar Index (DXY), which had plunged to as much as 102.94 on Monday amidst the weak sentiment following the dull jobs data, traded above 103 on Tuesday as well as Wednesday. However, the steady decline in inflation expedited the Dollar's weakness causing the Dollar Index to drop to a low of 102.08 on Thursday and to the weekly low of 101.99 on Friday.

During the week January 9-13, the DXY depreciated from 103.91 to 102.20. The Dollar's bearish tilt provided a bullish prod to major currencies like the Euro, Pound, Yen etc.

The Euro strengthened against the Dollar over the course of the past week. The EUR/USD pair increased from 1.0637 at the beginning of the week to 1.0828 at the end of the week. The pair touched a low of 1.0536 on Monday and a high of 1.0869 on Friday. Besides the U.S. CPI, the war in Ukraine, the energy crisis and a hawkish ECB also influenced the pair's movements in the past week.

The GBP/USD pair also strengthened in the past week, from 1.2094 at the beginning of the week to 1.2226 by the close of the week. The pair touched the weekly low of 1.2087 on Monday as well as Thursday. The surprise uptick in U.K.'s GDP in the month of November as well as the Dollar's weakness post the drop in U.S. CPI caused the pound to touch the weekly high of $1.2250 on Friday.

The USD/JPY pair which closed at 132.07 on January 6 dropped to 127.88 by January 13. USD/JPY touched a high of 132.88 on Wednesday and a low of 127.46 on Friday. The yen's strength against the Dollar and its rise to a seven-month high came ahead of the meeting of Bank of Japan and speculations that rising inflation in the country could goad the BoJ to adopt a more hawkish stance.

While the Dollar Index remains subdued at 102.13, post the softening in the inflation, all eyes are on Bank of Japan and its likely stance on inflation control and interest rates. The yen has indeed benefitted from speculations of a hawkish pivot by the BoJ after last month's tweaking of the yield curve control policy. The USD/JPY pair is currently at 128.60, ahead of the BoJ decision to be known later on Tuesday. The EUR/USD pair currently at 1.0846 and the GBP/USD pair currently at 1.2257, would also be swayed by hawkish monetary policy leanings at home as well as elsewhere.

read more
Australian Market Trims Early Gains In Mid-market

Australian Market Trims Early Gains In Mid-market

The Australian market is trimming its early gains in mid-market moves on Wednesday, but extending the gains in the previous session, with the benchmark S&P/ASX 200 moving above the 8,600 level to fresh all-time highs, following the positive cues from Wall Street overnight, with gains in iron ore miners, energy and financial stocks partially offset by weakness in gold miners and technology stocks.
RTTNews | vor 21 Minuten
Asian Markets Track Wall Street Higher

Asian Markets Track Wall Street Higher

Asian stock markets are trading mostly higher on Wednesday, following the broadly positive cues from Wall Street overnight, amid easing trade war tensions after top U.S. and Chinese officials agreed upon a "framework" to move forward on trade, following two days of high-level talks in London. The framework will first need to be approved by leaders in Washington and Beijing.
RTTNews | vor 45 Minuten
Sensex, Nifty Set For Muted Start

Sensex, Nifty Set For Muted Start

Indian shares are seen opening little changed on Wednesday despite top U.S. and Chinese officials agreeing on a "framework" to move forward on trade, following two days of high-level talks in London.
RTTNews | vor 1Std 14 Minuten
Thai Bourse May Extend Tuesday's Gains

Thai Bourse May Extend Tuesday's Gains

The Thai stock market on Tuesday ended the two-day slide in which it had slipped more than 5 points or 0.4 percent. The Stock Exchange of Thailand now rests just beneath the 1,140-point plateau and it may tick higher again on Wednesday.
RTTNews | vor 1Std 46 Minuten
Japanese Market Modestly Higher

Japanese Market Modestly Higher

The Japanese stock market is trading modestly higher on Wednesday, extending the gains in the previous three sessions, following the broadly positive cues from Wall Street overnight. The Nikkei 225 is moving above the 38,300 level, with gains across most sectors led by index heavyweights and technology stocks. Financial stocks are a weak spot.
RTTNews | vor 2Std 11 Minuten
Indonesia Shares May Open To The Upside

Indonesia Shares May Open To The Upside

The Indonesia stock market has moved higher in three straight sessions, gathering almost 190 points or 2.7 percent along the way. The Jakarta Composite Index now rests just above the 7,230-point plateau and it's looking at a firm lead again for Wednesday's trade.
RTTNews | vor 2Std 16 Minuten
Higher Open Expected For Hong Kong Shares

Higher Open Expected For Hong Kong Shares

The Hong Kong stock market has moved lower in two of three trading days since the end of the three-day winning streak in which it had rallied almost 750 points or 3.5 percent. The Hang Seng Index now sits just above the 24,160-point plateau and it's likely to remain rangebound on Wednesday.
RTTNews | vor 2Std 31 Minuten
Australian Market Notably Higher

Australian Market Notably Higher

Australian shares are trading notably higher on Wednesday, extending the gains in the previous session, with the benchmark S&P/ASX 200 moving well above the 8,600 level, following the broadly positive cues from Wall Street overnight, with gains across most sectors led by energy and technology stocks.
RTTNews | vor 2Std 35 Minuten