Last week’s CPI and PPI data suggested a small increase in headline PCE inflation. Along with hawkish comments from the Fed, the DXY Index gained more than 1.5% during the previous week.
This morning the index stays in a consolidation phase above 106.50 as we begin a relatively quiet start to the week.
This week we’re looking forward to PMI data and Jobless Claims on Thursday, as well as University of Michigan Sentiment on Friday. Speeches from Fed officials will be given throughout the week.
EURUSD fell by 1.7% last week and recorded its lowest weekly close since October 2023.
Hovering around 1.0550 at the start of the session, the single currency is well below the 1.08 psychological barrier level that seemed difficult to break a couple of weeks ago. During the past week, cautious comments from Fed officials and stronger-than-expected US Retails data supported the US Dollar.
1.05 remains the new support level at the start of the week, with some key events coming out. President Lagarde is delivering a couple of speeches this week, as well as Eurozone PMI data coming out on Friday.
GBPUSD declined over 2% last week and closed at a low of 1.2599. UK economic data released on Friday showed the economy shrinking by 0.1% compared to the 0.2% predicted growth. Strong US data furthered cable decline.
Key data coming out this week is CPI data on Wednesday, followed by Retail Sales and PMI data on Friday.
World News
This morning, BoJ Governor Kazuo Ueda shared that the Japanese economy is recovering despite the weak signs. When focusing on the yen, he stated: “We will scrutinize at each policy meeting how foreign exchange moves affect our economic, price forecasts and risks.”
Hovering around 154.50 this morning, the USDJPY pair recently reached multi-month highs of 156.60 following strong US economic performance, weaker Japanese GDP data, and BoJ rate-hike uncertainty.
