Yesterday, Fed Chair Powell was expected to participate in the debate, but no specific monetary policy or economic outlook was mentioned. The market, which had been speculating that it would follow the hawkish remarks of the US Fed that has been going on for some time, was disappointed. There is a history of adjustment in the trend that was leaning toward dollar buying in advance.
The US consumer price index for December will be announced tomorrow. Markets are watching with great interest as a gauge of future inflation trends. Current market forecasts are +6.5% YoY (previous +7.1%), core +5.7% YoY (previous +6.0%), -0.1% month-on-month (previous +0.1%), Core is up 0.3% m/m (previous +0.2%).Year-on-year growth, which is a hot topic, is expected to slow down along with the core.The recent market has been slightly different from expectations. As the dollar exchange rate fluctuates frequently, it is necessary to manage positions in advance.
According to the most recently released US economic indicators, the US employment statistics show a slowdown in average weekly wage growth and the ISM non-manufacturing business climate index has fallen more than expected, prompting the market to sell more dollars. Due to yesterday’s Powell chairman’s shoulder, the market is likely to tilt slightly toward a weaker dollar.
As all eyes are on tomorrow’s US consumer price index, we expect the market to be quieter today, but the USD selling will still have a slight edge.