That was significantly stronger than economists had forecast and a notable acceleration from December’s monthly rise of 0.4% and 2.9% year-over-year measure. In terms of strategy, the Dollar Index is widely used to hedge risk in the currency markets or to take a position in the US Dollar without having the risk exposure of a single currency pair. The economic policies of the Trump administration are starting to take shape. President Trump has already announced the imposition of tariffs on some of America’s trading partners, and we assume there will be more levies, which will be matched by foreign retaliation, in the coming quarters. A few macroeconomic factors have a significant impact on the US Dollar Index price. These include, among others, inflation and deflation in the US dollar and foreign currencies included in the comparable basket, as well as economic growth and recessions in the respective countries.
The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or bitmex review its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat.
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The constituents of the foreign currency basket were altered only once when several European currencies were subsumed by the euro in early 1999. It’s just another Wednesday morning, another first day of the positioning week for funds, with Watson waiting to see what comes out of Washington. Friday’s US Jan retail sales report of -0.9% was weaker than expectations of -0.2%.
Excluding autos, Jan retail sales fell by -0.4%, weaker than expectations of +0.3%. Jan “control group” retail sales, which excludes volatile sectors, fell by -0.8%, weaker than expectations of +0.3%. However, the retail sales report was undercut to some extent by the wildfires in California and severe weather in various areas of the country. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use.
EUR/USD hits two-week tops near 1.0500 on poor US Retail Sales
Last month’s hotter-than-expected inflation levels will no doubt create more headaches for the Federal Reserve—and likely will reignite the debate over whether interest-rate hikes may be on the table. A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the forex blog central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it.
The odds of a rate cut at the upcoming March meeting were just 2.5% after Wednesday’s inflation release, according to the CME FedWatch tool. And looking out over the next few months, the probability that the Fed would hold rates steady is higher all the way through until the September meeting. The Barchart Technical Opinion widget shows you today’s overall Barchart Opinion with general information on how to interpret the short and longer term signals. Unique to Barchart.com, Opinions analyzes a stock or commodity using 13 popular analytics in short-, medium- and long-term periods. Results are interpreted as buy, sell or hold signals, each with numeric ratings and summarized with an overall percentage buy or sell rating.
Technicals
- If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned.
- Since the pandemic, January has routinely posted firmer readings that tend to fade in the second half of the year.
- XRP, Solana (SOL) and Dogecoin (DOGE) gained 5.91%, 2.88% and 3.36% respectively on Friday.
- It is the task of the central bank to keep the demand in line by tweaking its policy rate.
- Central Banks have a key mandate which is making sure that there is price stability in a country or region.
- Atlanta Fed President Raphael Bostic and Fed Governor Waller are set to make comments as well.
This is to be expected since the average includes data from the previous, lower priced days. As long as prices remain above the average there is strength in the market. New Highs/Lows only includes stocks traded on NYSE, NYSE Arca, Nasdaq or OTC-US exchanges with over 5 days of prices, with a last price above $0.25 and below $10,000, and with volume greater than 1000 shares. Overall services inflation (excluding energy services) rose 0.5% month over month in January, up 4.3% compared with a year ago. Inflation was hotter than expected last month, but it’s worth keeping in mind that annual pricing shifts and even minimum wage increases can plague consumer prices at the start of a new year. The continuation of the offered stance in the Greenback coupled with declining US yields across the board underpin the extra rebound in Gold prices, which trade at shouting distance from their record highs.
What does a central bank do?
During his first testimony at Capitol Hill facing law makers, Federal Reserve (Fed) Chairman Jerome Powell did not leave many clues about the timing for another interest rate cut by the central bank, if any. Traders are mulling what to do next, with US yields slowly but surely starting to head higher this week. The dollar index (DXY00) on Friday fell by -0.52%, posting a new 2-month low and adding to Thursday’s decline of -0.58%. The dollar was undercut by Friday’s weak US retail sales report and a -5 bp decline in the 10-year T-note yield, which added to Thursday’s decline of -9 bp. Also, there were continued fears about a global trade war after President Trump on Friday said that new tariffs on autos are coming around April 2. But there’s been no evidence of disinflation with the core CPI rate since the middle of last year, writes Conrad DeQuadros, senior economic advisor at Brean Capital.
technicals
And the so-called supercore measure, which excludes food, energy, and housing, was at an elevated 4.1% year over year in January. Seasonal factors, such as minimum wage increases and annual pricing updates, likely accounted for some of inflation’s strength last month. Since the pandemic, January has routinely posted firmer readings that tend to fade in the second half of the year. Additionally, the effects of the Los Angeles wildfires might have pushed used car prices higher, a trend that should fade quickly. The consumer price index rose 0.5% in January and 3% from a year earlier, according to the latest data released Wednesday from the Bureau of Labor Statistics.
- The odds of a rate cut at the upcoming March meeting were just 2.5% after Wednesday’s inflation release, according to the CME FedWatch tool.
- The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated.
- Jan “control group” retail sales, which excludes volatile sectors, fell by -0.8%, weaker than expectations of +0.3%.
- This fundamental information helps me understand what reports and indicators the economists of the world believe will shape future events.
- The DXY Index is often used by traders to monitor the value of the USD in comparison to a basket of select currencies in a single transaction.
A look at https://www.forex-reviews.org/ the Barchart Futures Market Heat Map early Tuesday morning showed nearly all sectors of the commodity complex in the red.
