-1705485619.png)
Waller Says Fed Relaxed on Rate Cut Timing
The US Dollar continues to make ground across early 2024 trading as Fed members pushback against those calling for imminent rate cuts in the US. Speaking yesterday, Fed’s Waller reiterated comments made by chairman Powell in December noting that, while rate cuts were likely this year, the Fed has ample time to ease out of its current tightening program in a relaxed manner. Market pricing is currently pegging an expected March rate cut. However, on the back of Waller’s comments yesterday, pricing has fallen to around 60% from around 70% previously.
US CPI On Watch
Last month’s uptick in inflation was seemingly ignored by traders with barely any change in March rates pricing. However, in light of these comments from Waller yesterday, traders will now be keenly awaiting the next CPI data to see if the uptick was a temporary blip or a potential bottoming in inflation. If the latter is seen we could well see March rate cut pricing falling below 50% which would send USD sharply higher near-term, causing material impact across FX and other markets.
US Retail Sales Due
Looking ahead today, we have US December retail sales this afternoon. The data is expected roughly flat, month on month. However, should we see an uptick in this data, the current USD uptrend is likely to gather further pace near-term.
Technical Views
USDJPY
The failed break below the 142.03 level has seen the market reversing sharply higher in recent weeks. Price is now trading back above the 145 level and is fast approaching a test of the 148.98 level and a retest of the broken bull trend line. With momentum studies bullish the focus remains on further upside while 145 holds as support.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.