Dollar Dives as Cooling Inflation Gives Nod to Slower Fed Tightening

Action Insight Mid-Day Report 1-12-23

Dollar Dives as Cooling Inflation Gives Nod to Slower Fed Tightening

Dollar declines sharply after US data showed consumer inflation slowed notably in December as expected. The development reinforces expectation for Fed to further slowdown tightening in February with a 25bps hike. Yen is so far the strongest one for the day, as lifted by decline in US and European benchmark yields. Australian Dollar is leading commodity currencies higher on risk-on sentiment. European majors, while up against the greenback, is lagging behind.

Technically, Gold also jumps on Dollar selloff and it's now having sight on 1900 handle. Sustained break there will pave the way to 161.8% projection of 1616.51 to 1786.63 from 1728.48 at 2004.05. However, break of 1866.94 support will be the first sign of topping, which could be a signal for Dollar bottoming too.

In Europe, at the time of writing, FTSE is up 0.81%. DAX is up 0.68%. CAC is up 0.89%. Germany 10-year yield is down -0.079 at 2.095. Earlier in Asia, Nikkei rose 0.01%. Hong Kong HSI rose 0.36%. China Shanghai SSE rose 0.05%. Singapore Strait Times dropped -0.11%. Japan 10-year JGB yield dropped -0.0005 to 0.505.

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Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol

AUD/USD Mid-Day Report

Daily Pivots: (S1) 0.6877; (P) 0.6902; (R1) 0.6930; More...

AUD/USD's rally resumed after brief consolidation and intraday bias back on the upside. Current rally from 0.6169 is in progress to 61.8% projection of 0.6169 to 0.6892 from 0.6721 at 0.7444. On the downside, break of 0.6875 minor support will turn intraday bias neutral and bring consolidations again. But overall outlook will stay bullish as long as 0.6721 support holds, in case of retreat.

 

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EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD

EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY

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Economic Calendar
GMT Ccy Events Actual Forecast Previous Revised
21:45 NZD Building Permits M/M Nov 7.00% -10.70%
23:50 JPY Bank Lending Y/Y Dec 2.70% 2.80% 2.70%
23:50 JPY Current Account (JPY) Nov 1.92T 0.65T -0.61T
00:30 AUD Trade Balance (AUD) Nov 13.20B 11.30B 12.22B 12.74B
01:30 CNY CPI Y/Y Dec 1.80% 1.80% 1.60%
01:30 CNY PPI Y/Y Dec -0.70% -0.10% -1.30%
05:00 JPY Eco Watchers Survey: Current Dec 47.9 47.8 48.1
09:00 EUR ECB Economic Bulletin
13:30 USD Initial Jobless Claims (Jan 6) 205K 210K 204K 206K
13:30 USD CPI M/M Dec -0.10% 0.00% 0.10%
13:30 USD CPI Y/Y Dec 6.50% 6.50% 7.10%
13:30 USD CPI Core M/M Dec 0.30% 0.30% 0.20%
13:30 USD CPI Core Y/Y Dec 5.70% 5.70% 6.00%
15:30 USD Natural Gas Storage -15B -221B