Forex Today: Inflation in the eye of the storm

Valeria Bednarik FXStreet

What you need to take care of on Wednesday, January 18:

The US Dollar retained its intrinsic weakness on Tuesday, ending the day with losses against all of its major rivals. The Euro was the worst performer, while the British Pound was the best against the Greenback.

On the one hand, the EUR/USD pair fell to 1.0771 amid market talks suggesting European Central Bank (ECB) officials are considering slowing the pace of tightening. Rumors suggest President Christine Lagarde & co will opt for a 50 basis points (bps) rate hike in February, reducing hikes to 25 bps starting in March.

On the other hand, GBP/USD flirted with 1.2300 after the United Kingdom’s employment-related figures hinted at a relatively tight labour market. The Bank of England would then have room to push the benchmark rate higher and maintain it there for longer. The UK will publish December inflation figures on Wednesday.

The Canadian Consumer Price Index (CPI), rose at an annual pace of 6.3% in December, while the monthly CPI fell by 0.6%. USD/CAD trades around 1.3376.

The AUD/USD pair finished Tuesday near the 0.7000 level, retaining its positive momentum despite the poor tone of global equities.

The USD/JPY pair trades around 128.40 ahead of the Bank of Japan monetary policy decision.

Spot gold trades little changed at around $1,907, while crude oil prices were up, with WTI hovering around $81 per barrel.

Wednesday will bring an update on EU inflation, the US Producer Price Index and the UK CPI.

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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