EUR/USD: Focus on US CPI and Fed cuts – Deutsche Bank
|Deutsche Bank analysts note that EUR/USD was little changed, with the Dollar Index edging higher, as markets await the US CPI release for January. The bank’s US economists project a softer headline CPI but firmer core, and traders have nudged Fed rate-cut expectations higher after weaker US data, while still pricing further easing under a new Fed Chair.
US inflation and Fed expectations eyed
"Looking forward, attention will today turn to the US CPI print for January, which is a couple of days later than expected because of the partial government shutdown."
"This is an important one, because markets are still expecting further rate cuts under a new Fed Chair, but stronger data like the jobs report on Wednesday has led to a bit more doubt as to whether that’s still possible."
"In terms of what to expect, our US economists forecast that monthly headline CPI would be at +0.26% in January, down from +0.31% in December."
"However, they think that headline inflation would be weighed down by a -2.4% decline in motor fuel prices, meaning that core CPI should be relatively strong at +0.35% on the month."
"For instance, the amount of cuts priced in by the December meeting was up +5.3bps on the day to 53bps."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.