The dollar market is generally strong this week. Since the beginning of February, the dollar index has shown a golden cross (10-day line above 21 line) at the 10 + 21-day moving average line. Gradually, the 10-day line is being recognized as a support level.
In terms of material, the fact that a series of US economic statistics have exceeded expectations seems to be leading to speculation that the US interest rate hike period will be postponed. The US consumer price index rose 6.4% from a year ago on the 14th, the slowdown from the previous +6.5% was minimal and exceeded the market expectation of +6.2%. Yesterday, the NY Fed’s manufacturing index improved significantly from -32.9 to -5.8, surpassing market expectations. Retail sales increased by 3.0% from the previous month, a sharp recovery from -1.1% in the previous month, and surpassed market expectations of +2.0%. On the other hand, industrial production remained flat compared to the previous month, showing a weak pace of recovery. Although the trend of declining inflation is somewhat slowing down, we should be cautious, but US consumption is strong. The strength of the latest US employment data appears to be contributing to the strength of consumption.
Under such circumstances, it will be necessary to carefully check various economic statistics to see if the strength of the US economy is becoming real. A series of US economic data will be released today at 10:30 p.m. Japan time. January Producer Price Index, January housing starts and building approvals, February Philadelphia Fed Business Index, last week’s US unemployment claims, etc. This week’s results have surpassed prior expectations, but what about today’s numbers? Along with the extent to which growth in the US PPI slows down, the key point will be whether there are signs that the US housing-related indicators, which are alarmed by high interest rates, will emerge from the slump.
Recent US economic indicators have been favorable across the board, and the image of the US economy as strong enough to withstand interest rate hikes. There is some USD buying on the assumption that even if interest rates are raised, the market will be able to withstand it. As the weekend is approaching soon, we assume that USD selling will come in for the time being.