Dollar Drops as CPI Revives Hopes for Fed Rate Cut in Sep
| Action Insight Mid-Day Report 5-15-24 |
Dollar Drops as CPI Revives Hopes for Fed Rate Cut in Sep |
Dollar falls broadly in early US session following the release of CPI data that shows disinflation resumed in April. This has reignited hopes that Fed is on track to start cutting interest rates by September, with Fed fund futures now indicating more than 70% probability of such a move. The renewed optimism has also boosted stock futures, which are pointing to a significantly higher open. Should major stock indexes extend their gains and to new record highs today, the resulting risk-on sentiment could feed back into currency markets and push the Dollar even lower. Overall in the forex market,Yen is surprisingly the strongest currency of the day at this point. While it's too soon to confirm a definitive reversal, the drop in global benchmark yields in response to US CPI data could support a sustainable near-term rebound for Yen. New Zealand Dollar follows as the second strongest currency, trailed by British Pound. On the weaker side, Euro is the second worst performer, following Dollar, with Canadian Dollar just ahead. Australian Dollar and Swiss Franc are positioned in the middle of the pack. |
USD/JPY Mid-Day Outlook Daily Pivots: (S1) 156.09; (P) 156.43; (R1) 156.78; More... USD/JPY's break of 155.25 minor support argues that rebound from 151.86 has completed already. Fall from 156.78 is seen as the third leg of the corrective pattern from 160.20 high. Intraday bias is back on the downside for 151.86 support and possibly below. On the upside, however, break of 156.78 will resume the rebound from 151.86 to 157.98 resistance instead. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 01:30 | AUD | Wage Price Index Q/Q Q1 | 0.80% | 1.00% | 0.90% | 1.00% | | 09:00 | EUR | Eurozone GDP Q/Q Q1 P | 0.30% | 0.30% | 0.30% | | 09:00 | EUR | Eurozone Employment Change Q/Q Q1 P | 0.30% | 0.30% | 0.30% | | 09:00 | EUR | Eurozone Industrial Production M/M Mar | 0.60% | 0.50% | 0.80% | | 12:15 | CAD | Housing Starts Y/Y Apr | 240K | 232K | 242K | | 12:30 | CAD | Manufacturing Sales M/M Mar | -2.10% | -1.40% | 0.70% | 0.90% | | 12:30 | USD | Empire State Manufacturing Index May | -15.6 | -10.8 | -14.3 | | 12:30 | USD | Retail Sales M/M Apr | 0.00% | 0.40% | 0.70% | | 12:30 | USD | Retail Sales ex Autos M/M Apr | 0.20% | 0.20% | 1.10% | | 12:30 | USD | CPI M/M Apr | 0.30% | 0.30% | 0.40% | | 12:30 | USD | CPI Y/Y Apr | 3.40% | 3.40% | 3.50% | | 12:30 | USD | CPI Core M/M Apr | 0.30% | 0.30% | 0.40% | | 12:30 | USD | CPI Core Y/Y Apr | 3.60% | 3.60% | 3.80% | | 14:00 | USD | Business Inventories Mar | 0.00% | 0.40% | | 14:00 | USD | NAHB Housing Market Index May | 51 | 51 | | 14:30 | USD | Crude Oil Inventories | -0.4M | -1.4M |
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