Dollar Weakens as CPI Slowed as Expected, Easing Pressure on Fed
| Action Insight Mid-Day Report 3-14-23 |
Dollar Weakens as CPI Slowed as Expected, Easing Pressure on Fed |
Dollar weakened slightly in early US session, following the release of economic data which showed that consumer inflation slowed in February to the level as expected. The absence of an upside surprise in the CPI readings means that Fed should be in a more comfortable position to address uncertainties over the banking system. This could make a 50bps rate hike look much less necessary to policymakers, while the markets have already priced it out. US futures rose after the release, indicating a potential rebound. However, Treasury yields remained steady. In the currency markets, Canadian Dollar is the strongest performer today so far, followed by New Zealand and Australian Dollars. Yen was the worst performer, reversing all gains made against all currencies except the greenback. Euro and Dollar were the next weakest performers. Euro, in particular, is lacking some firepower as the markets question whether ECB will deliver on its promise of a 50 basis points rate hike this Thursday. Technically, a major focus is still on whether Dollar would break through near term support levels against commodity currencies, to alight with the near term bearish outlook against others. The levels to watch include 0.6694 resistance in AUD/USD, 0.6725 resistance in NZD/USD, and 1.3664 support in USD/CAD. Decisive break of these levels is need to confirm underlying weakness in Dollar. In Europe, at the time of writing, FTSE is up 0.55%. DAX is up 1.63%. CAC is up 1.42%. Germany 10-year yield is up 0.1451 at 2.403. Earlier in Asia, Nikkei dropped -2.19%. Hong Kong HSI dropped -2.27%. China Shanghai SSE dropped -0.72%. Singapore Strait Times dropped -0.08%. Japan 10-year JGB yield dropped -0.0226 to 0.283. |
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.0672; (P) 1.0710; (R1) 1.0771; More... EUR/USD's rally from 1.0523 is still in progress and intraday bias stays on the upside. As noted before, corrective decline from 1.1032 should have completed at 1.5023, ahead of 1.0482 key support. Break of 1.0803 resistance will bring retest of 1.1032 high next. On the downside, below 1.0649 minor support will turn intraday bias neutral. But risk will stay on the upside as long as 1.0523 support holds, in case of retreat. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:30 | AUD | Westpac Consumer Confidence Mar | 0.00% | -6.90% | | 00:30 | AUD | NAB Business Conditions Feb | 17 | 18 | | 00:30 | AUD | NAB Business Confidence Feb | -4 | 6 | | 07:00 | GBP | Claimant Count Change Feb | -11.2K | -12.4K | -12.9K | -30.3K | | 07:00 | GBP | ILO Unemployment Rate (3M) Jan | 3.70% | 3.80% | 3.70% | | 07:00 | GBP | Average Earnings Excluding Bonus 3M/Y Jan | 6.50% | 6.60% | 6.70% | | 07:00 | GBP | Average Earnings Including Bonus 3M/Y Jan | 5.70% | 5.70% | 5.90% | 6.00% | | 07:30 | CHF | Producer and Import Prices M/M Feb | -0.20% | 0.50% | 0.70% | | 07:30 | CHF | Producer and Import Prices Y/Y Feb | 2.70% | 3.40% | 3.30% | | 09:00 | EUR | Italy Industrial Output M/M Jan | -0.70% | -0.40% | 1.60% | 1.20% | | 11:00 | USD | NFIB Business Optimism Index Feb | 90.9 | 91.2 | 90.3 | | 12:30 | CAD | Manufacturing Sales M/M Jan | 4.10% | -0.40% | -1.50% | -2.10% | | 12:30 | USD | CPI M/M Feb | 0.40% | 0.40% | 0.50% | | 12:30 | USD | CPI Y/Y Feb | 6.00% | 6.00% | 6.40% | | 12:30 | USD | CPI Core M/M Feb | 0.50% | 0.40% | 0.40% | | 12:30 | USD | CPI Core Y/Y Feb | 5.50% | 5.50% | 5.60% |
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