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The pair is having a bad month and posted another losing week, but managed to avoid new year lows on Friday and now trades with caution ahead of Wednesday’s policy decision by the central bank of New Zealand
FXCM’s USDOLLAR has charted a lower peak followed by a lower trough. This is a defined down trend.
The pair heads towards its best week of the year after this week’s hotter than expected consumer and factory gate inflation from the US, as well as continued hawkish comments by Fed officials
The pair comes from two straight negative weeks, but tries to stop its losing streak, as it bounces off of critical tech levels
Australian Unemployment rose to the highest in eight months and the pair’s kneejerk reaction was lower, but quickly covered the losses
The AUDUSD charted a spinning top yesterday. This is a candle of uncertainty. Bulls tried to take price up and bears tried to take price down. Neither was successful, with AUDUSD closing fairly flat on the day.
UK headline inflation dropped to 10.1% with a 4% drop in petrol and diesel prices in January. The core inflation rate decreased below 6%. The continuous disinflation trend in goods categories due to improving supply chains and lower consumer demand is linked to the decline in core inflation.
The real yield is in its hawkish channel, between the upper blue and red bands (top chart). The core CPI printed at 0.4% m/m, higher than the previous 0.3% m/m. This is 4.9% annualised, much higher than the previous 3.66%. The Fed still has work to do to bring core inflation down towards its target of 2% average.
The pair made a strong start to the week and trades mixed after the UK employment report, as markets brace for CPI inflation updates from the US today and the UK tomorrow
A surprise announcement on Friday saw Japanese Prime Minister Kishida appoint Kazuo Ueda as the new BoJ governor. Ueda is a hawk relative to Mosayoshi Amamiya, the current deputy governor. However, his current leaning will probably have a dovish tilt with monetary policy shifting slowly.
The European Commission upgraded its 2023 growth forecast, but the pair is little changed, as markets brace for the latest CPI inflation data from the US on Tuesday
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