- EUR/USD oscillates below 1.0850 amid a holiday in the United States market.
- The US Dollar Index (DXY) is looking to drop below the immediate support of 101.75 amid an upbeat market mood.
- The release of the US PPI and Retail Sales will provide decisive moves in the asset ahead.
The EUR/USD pair is struggling to find any direction as the United States markets are closed on Monday on account of Martin Luther King’s Birthday. The major currency pair is juggling below 1.0840 as investors have shifted their focus toward the release of the United States Producer Price Index (PPI) and Retail Sales data.
S&P500 futures witnessed marginal selling pressure in early Asia but have recovered their losses and turned positive, portraying an improvement in investors’ risk appetite. The US Dollar Index (DXY) is looking to drop below the immediate support of 101.75 amid an upbeat market mood.
Last week, the USD Index witnessed immense pressure after a slowdown in December’s Consumer Price Index (CPI) in the United States, which bolstered the case of a more minor interest rate hike announcement by the Federal Reserve (Fed) ahead. Going forward, the USD Index could continue its downside trend for longer as the Fed will look to pause policy tightening.
According to economists at Wells Fargo, an end to monetary tightening should bring the US Dollar's gains to an end by early 2023. Indeed, we believe a peak in the trade-weighted US Dollar for the current cycle has already been reached.” They forecasted a more pronounced pace of USD depreciation in 2024 once the Fed begins cutting its policy interest rate by early next year.
On Wednesday, investors will focus on the release of the US Producer Price Index (PPI) data. The street is expecting a decline amid lower gasoline prices, providing producers room to trim prices at factory gates due to lower production costs. Also, a reduction in retail demand will be equalized by lower prices. Apart from that, Retail Sales data will be keenly focused.
Meanwhile, Eurozone investors are cheering Germany’s preliminary Gross Domestic Product (GDP) expanded by 1.9% on an annualized basis in 2022 compared to the +1.8% market consensus and +2.6% the prior release.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.