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Forecasting the Coming Week: US CPI takes centre stage

by FX BrokerNews

A challenging week for the Greenback concluded with the USD Index (DXY) sliding to its lowest levels in two months, around 102.30. Investors persistently factored in the likelihood of a rate cut in June, contributing to the Dollar’s decline. Concurrently, the downtrend in US yields further exacerbated the Greenback’s weakening. On the domestic front, the ECB adhered to expectations by keeping its policy rates unchanged, with market participants anticipating the commencement of its easing cycle in June.

The USD Index (DXY) experienced substantial losses this week, plummeting to the low-102.00s, marked by a robust US NFP on Friday. Looking ahead to the coming week, focus remains on the US Inflation Rate scheduled for March 12, which is anticipated to be a focal point of discussions. On March 14, other key releases include Producer Prices, Retail Sales, weekly Initial Jobless Claims, and Business Inventories. The week concludes with Industrial Production and the advanced Michigan Consumer Sentiment.

EUR/USD gained momentum, surmounting the 1.0900 threshold amid growing expectations of an ECB rate cut in June. Noteworthy releases on the European calendar feature Germany’s final Inflation Rate on March 12 and Eurozone Industrial Production on March 13.

GBP/USD reached multi-month highs, approaching the 1.2900 level, driven by the ongoing upward trend. The UK calendar for the upcoming week includes the labor market report on March 12, followed by GDP figures, Construction Output, Goods Trade Balance, Industrial and Manufacturing Production, and the NIESR Monthly GDP Tracker on March 13.

USD/JPY extended its weekly decline, reaching five-week lows around 146.50, influenced by the Greenback’s significant sell-off and speculation about a potential BoJ lift-off later in the month. Japan’s calendar for the week includes the final Q4 GDP Growth Rate, Producer Prices, and the BSI Large Manufacturing index on March 12. Weekly Foreign Bond Investment figures are due on March 14, with the Tertiary Industry Index expected towards the end of the week.

AUD/USD surpassed the crucial 0.6600 barrier, reaching two-month highs primarily due to Dollar dynamics. In Australia, Consumer Inflation Expectations are scheduled for March 15.

China’s economic releases encompass the Inflation Rate and Producer Prices on March 9, followed by New Yuan Loans on March 12 and the House Price Index on March 15. USD/CNH traded within a narrow range during the week, retreating below the 7.2000 level on Friday.

Anticipating Economic Perspectives: Voices on the Horizon

–      RBA S. Hunter speaks on March 11.

–      BoE C. Mann speaks on March 12.

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