Dollar Largely Unchanged Ahead of Key Inflation Release

Forex Market Outlook

AUD/USD is trading up 0.26% at 0.7196

The U.S. dollar traded largely unchanged Thursday with the focus on the release of the latest U.S. inflation report later in the day which should provide clues about the pace of the Federal Reserve’s policy tightening.

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded flat at 95.505, having moved little this week, in contrast to the volatile two weeks prior.

The January U.S. consumer prices release is due at 8:30 AM ET (1330 GMT), and the headline CPI is seen rising 0.5% on the month and 7.3% on the year in January, the highest number since 1982.

The Federal Reserve is expected to lift interest rates by 25 basis points in March to combat these surging prices, and the question in most traders’ minds is whether this CPI number will be enough to nudge the Fed towards a 50 bp hike.

Cleveland Federal Reserve President Loretta Mester said on Wednesday that it is time for the central bank to begin raising interest rates, but “I don’t think there’s any compelling case to start with a 50 basis point” rate increase.

This view seems to match the majority of her fellow policymakers who have commented, but a very high CPI print could still sway the argument.

The risk-sensitive AUD/USD climbed 0.1% to 0.7182, nearing a three-week high.

On technical fronts, AUD/USD RSI stood at 62.46, and currently, it is trading above all MA. So, the BUY position can be taken with the following target and stop loss:

TRADE SIGNAL – : AUD/USD – BUY: 0.7194, TARGET: 0.7221, STOP LOSS : 0.7167

About Author

Related posts

Dollar Index

Dollar Stabilizes Below 20-Year High; Bostic Comments in Focus

Dollar Index is trading down 0.09% at 103.54 The U.S. dollar stabilized in early European trade Tuesday after earlier falling back from a two-decade high as traders reappraise the likelihood of aggressive Federal Reserve rate increases. At 3:05 AM ET (0705 GMT), the Dollar Index, which tracks the greenback...

Read More

Leave a Reply