EURUSD: The USD is quiet with low trading volume
Updated
The dollar was weak in early European trading on Monday as traders weighed the possibility of an early interest rate cut by the Federal Reserve and a U.S. holiday slowed trading volume.
At 4:35 p.m. ET (9:35 p.m. Japan time), the dollar index, which tracks the U.S. dollar against a basket of six other currencies, was trading 0.1% higher at 102.242 as the holiday began. Martin Luther King Jr.
Data released on Friday showed the U.S. producer price index unexpectedly fell in December, increasing traders' expectations that the Federal Reserve will start cutting interest rates as early as this year.
According to the CME FedWatch tool, the market now has a 78% chance that the Fed will start cutting interest rates in March, compared to a 68% chance a week ago.
This week's US statistical calendar is quiet, with the focus on retail sales figures scheduled to be released on Wednesday. Investors will be closely watched for signs that consumer spending, a key driver of economic growth, remains resilient despite rising interest rates.
Retail sales are expected to increase by 0.4% in December, following a 0.3% increase in November.
Investors will also have the opportunity to hear from several Fed officials, including Fed President Christoper Waller, Atlanta Fed President Rafael Bostic, and San Francisco Fed President Mary Daley.
The value of the euro rose even though Germany's GDP fell
In Europe, the euro/USD pair edged up to 1.0953, even as data showed the eurozone's largest German economy contracted by 0.3% in the final quarter of the year. Last year and he will decrease by the same amount throughout 2023. But despite this weakness, recent inflation data largely confirms the European Central Bank's current thinking, meaning rate cuts are not on the table in the short term, said ECB chief economist Philippe. Lane said Friday.
Eurozone inflation rose to 2.9% in December from 2.4% in November.
At 4:35 p.m. ET (9:35 p.m. Japan time), the dollar index, which tracks the U.S. dollar against a basket of six other currencies, was trading 0.1% higher at 102.242 as the holiday began. Martin Luther King Jr.
Data released on Friday showed the U.S. producer price index unexpectedly fell in December, increasing traders' expectations that the Federal Reserve will start cutting interest rates as early as this year.
According to the CME FedWatch tool, the market now has a 78% chance that the Fed will start cutting interest rates in March, compared to a 68% chance a week ago.
This week's US statistical calendar is quiet, with the focus on retail sales figures scheduled to be released on Wednesday. Investors will be closely watched for signs that consumer spending, a key driver of economic growth, remains resilient despite rising interest rates.
Retail sales are expected to increase by 0.4% in December, following a 0.3% increase in November.
Investors will also have the opportunity to hear from several Fed officials, including Fed President Christoper Waller, Atlanta Fed President Rafael Bostic, and San Francisco Fed President Mary Daley.
The value of the euro rose even though Germany's GDP fell
In Europe, the euro/USD pair edged up to 1.0953, even as data showed the eurozone's largest German economy contracted by 0.3% in the final quarter of the year. Last year and he will decrease by the same amount throughout 2023. But despite this weakness, recent inflation data largely confirms the European Central Bank's current thinking, meaning rate cuts are not on the table in the short term, said ECB chief economist Philippe. Lane said Friday.
Eurozone inflation rose to 2.9% in December from 2.4% in November.
Note
EURUSD BUY 1.0910- 1.0920TP1: 1.0950
TP2: 1.0990
SL: 1.0870
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