Pound Holds Firm as U.S. CPI Data Takes Focus
Markets are in cautious mode as traders await key U.S. inflation data and testimony from Fed Chair Powell. The January CPI report will provide insights into whether the Federal Reserve’s policy tightening is having its intended effect.
Meanwhile, the euro and pound are holding steady, while the yen weakens as risk sentiment shifts. Gold is slightly lower, and oil remains volatile amid shifting global demand expectations.
Key Data Out Today
- Eurozone:
- ECB’s Elderson Speech (10:00 GMT) – Markets will listen for hints on ECB’s rate outlook.
- German Bundesbank President Nagel Speech (17:30 GMT) – Commentary on Germany’s economic outlookmay impact the euro.
- United States:
- CPI (MoM & YoY) (13:30 GMT) – Inflation data will drive Fed expectations and market direction.
- CPI ex Food & Energy (MoM & YoY) (13:30 GMT) – A key core inflation measure, closely watched by policymakers.
- Fed Chair Powell Testimony (15:00 GMT) – Powell’s comments on inflation and rate policy will be critical for markets.
- Fed’s Bostic Speech (17:00 GMT), Waller Speech (22:05 GMT) – Additional Fed officials will give further economic insights.
- Monthly Budget Statement (19:00 GMT) – Will reveal U.S. government fiscal health.
- United Kingdom:
- BoE’s Greene Speech (15:00 GMT) – Markets will look for clues on the BoE’s rate direction.
Commodities
- Brent Crude: $76.22 (-1.01%) – Oil prices dipped amid demand concerns and shifting OPEC strategies.
- Coal: $104.75 (-0.85%) – Lower demand expectations continue to weigh on coal prices.
- Gold: $2,891.59 (-0.25%) – Gold is slightly lower as investors await CPI data and Fed commentary.
- Silver: $31.82 (-0.04%) – Silver remains relatively stable, tracking gold’s movements.
Currency Movements
EUR/USD – 1.0376 (+0.14%)
The euro is slightly stronger, supported by ECB speakers and upcoming German policy updates.
GBP/USD – 1.2450 (+0.03%)
The pound is stable ahead of BoE’s Greene speech, which could provide rate policy clarity.
AUD/USD – 0.6286 (-0.15%)
The Australian dollar is weaker, reflecting risk-off sentiment and commodity pressures.
NZD/USD – 0.5648 (-0.08%)
The New Zealand dollar is holding its range, with external factors driving movement.
USD/JPY – 153.56 (+0.70%)
The yen is weaker, with traders pricing in widening rate differentials between the Fed and the BoJ.
USD/CNY – 7.3142 (+0.06%)
The yuan remains under pressure, with China’s economic recovery still in question.
USD/CHF – 0.9113 (-0.22%)
The Swiss franc is stronger, benefiting from safe-haven flows ahead of U.S. inflation data.
USD/CAD – 1.4297 (+0.07%)
The Canadian dollar is weaker, with oil prices providing little support.
USD/MXN – 20.57 (+0.05%)
The peso is stable, reflecting broad dollar strength and Mexico’s economic positioning.
USD/INR – 86.86 (+0.07%)
The rupee is slightly weaker, with foreign inflows balancing against global risk trends.
Market Outlook
- U.S. inflation data will drive market sentiment, with investors awaiting Fed’s Powell for policy direction.
- Oil remains volatile, with OPEC and demand-side factors creating uncertainty.
- Gold traders are focused on inflation trends, while the dollar’s movement will impact precious metals.
- Currency markets are cautious, as traders position for major central bank speeches and data releases.