USD: Another moderation in core CPI helps reaffirm USD has peaked – TD Securities
|Inflation data from the United States released on Tuesday showed an increase in the Consumer Price Index in November of 0.1% below the 0.3% of market consensus. According to analysts from TD Securities another moderation in monthly core CPI helps to reaffirm that the USD peak is here.
Key Quotes:
“This print risks making the upcoming Fed meeting moot as claims of a "somewhat higher" terminal rate become harder to price in. USD positioning unwind flags overdone but with the risk that the ECB sounds and acts more hawkishly than the Fed this week means that a USD reversal is not harder to come by.”
“Near-term, we think USDJPY will remain heavy and risk a more significant break of the 200day especially if the Tankan survey shows more price passthrough (output prices are already at multi-decade highs). Strategically, we think a theme of divergence will dominate the yen (from a bullish side) as inflation peaks elsewhere (while it runs up further in Japan) and global central banks downshift or stop tightening (while the BOJ alters YCC).”
“For EURUSD, 1.0620 should be key resistance/pivot short-term, but the EUR was one of the first to lead USD underperformance so the risk here is that the move is tactically matured. We think this could be more likely on some crosses like the JPY.”
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.