US dollar suffered a double blow on Thursday, with solid US data and a disappointing ECB decision.
The US Dollar (USD) rises versus most major peers on Friday, painting the charts green following Thursday’s US GDP – Durable Goods – Jobless Claims data. At the same time, the European Central Bank (ECB) disappointed the market by not sticking out its neck and providing forward guidance on interest rate decreases. Traders were quick to punish! These occurrences have weakened the Euro and boosted the Greenback.
Traders prepare for the Fed’s favorite inflation barometer, Personal Consumption Expenditures.
On the economic front, traders are preparing for the US Federal Reserve’s (Fed) favored Personal Consumption Expenditures (PCE) report. Expect a slight increase in all factors on a monthly basis, with a decrease on an annual basis. Any decrease in these figures will be attributed to US dollar weakness in the pipeline.
Daily digest market movers: Fed’s barometer set to impact on US Dollar markets
Sweden is expected to join NATO after Hungary ratifies the agreement in parliament, as Turkey did earlier this week.
US Treasury Secretary Janet Yellen stated in an interview with ABC that she sees “no reason” for a recession this year.
Moreover The ECB will Around 13:15 GMT, it will announce its official rate decision and guidance note. A press release with a Q&A by Christina Lagarde will follow about 14:45.
The Personal Consumption Expenditures (PCE) statistics for December is scheduled to be issued at 13:30 GMT.
The monthly headline PCE is predicted to rise from -0.1% to 0.2%.
Furthermore Yearly headline PCE is expected to rise from 2.6% to an unchanged 2.6%.
Monthly core PCE is expected to rise from 0.1% to 0.2%.
Yearly Core PCE should decrease from 3.2% to 3.0%.
Personal income is expected to rise from 0.4% to 0.3%.
Personal spending will rise from 0.2% to 0.4%.
The final data point for this Friday arrives near 15:00, with Pending Home Sales predicted to rise from 0% to 1.5% in December compared to November.
The equity markets are This week’s last day saw all Asian indices fall by more than 1%, with Japan and China leading the way. Mainland Europe is taking over the sour mood, trading down around 0.50% midway through the European day. US futures are also falling, with the Nasdaq leading the way with Tesla and Intel pushing down the index.
According to the CME Group’s FedWatch Tool, markets are pricing in a 97.4% chance of an unchanged rate decision on January 31, with only a 2.6% chance of a decrease.
The benchmark 10-year US Treasury Note trades around 4.10%, which is slightly lower than earlier this week.
