US CPI Preview: What to expect of EUR/USD?
US inflation figures gauged by the CPI are due later in the session. Market consensus sees headline consumer prices advancing 0.1% on a year to October, while the Core reading – excluding Food and Energy costs – is seen at 1.9% on a yearly basis.
Inflation, or the lack of it, has been a persistent concern amongst FOMC members against the backdrop of a potential Fed’s lift-off, most likely to be announced at the December meeting. Many of the members have already expressed their divided views on the subject, and many have also coincided that current inflation levels remain low.
Europe’s Quiet Currency War Besets Nations Losing Inflation Grip
From Stockholm, where the Riksbank will publish the minutes of its latest policy meeting on Tuesday, to Prague, Copenhagen and Zurich, officials in countries circling the currency bloc are waiting for the European Central Bank president to say next month whether he’ll expand stimulus. Only then will it be clear whether they’ll need to retaliate with more asset purchases, rate cuts and currency interventions of their own to dig in against imported disinflation.
Draghi’s bonanza of cheap cash is depressing financial returns in the euro area and driving investment flows into neighboring countries, pushing up their currencies and defeating their efforts to hit their own inflation targets. Looser monetary policy is in the cards even in countries where economic growth is strong and asset markets are overheating.
USD/JPY stabilized around 123.20
The greenback has surrendered some its initial gains vs. its Japanese counterpart on Tuesday, taking USD/JPY to the 123.25/20 band, or session lows.
Spot continues to recover from last week’s decline, managing to rebound from recent lows in the 122.30/20 band and trading at shouting distance from 3-month tops around 123.50.
Ahead in the session, USD will be in the limelight as US inflation figures measured by the CPI are due. Consensus expects consumer prices to have gained 0.1% on a year to October, while Core prices are expected at 1.9% YoY.
| Important events and their explanation: |
| Time ( IST) | Currency | Economic Data | Actual | Expectation |
| 12:30am | USD | FOMC Meeting Minutes | ||
| Tentative | JPY | Monetary Policy Statement | ||
| Tentative | JPY | BOJ Press Conference | ||
| 7:00pm | USD | Unemployment Claims | 272K | 276K |
| 8:30pm | USD | Philly Fed Manufacturing Index | 0.1 | -4.5 |
| 11:00pm | USD | FOMC Member Lockhart Speaks |
Explanation:-
| Quick Glance : |
| Instrument | Price | %Chg | Volume | OI |
| USD/INR | 66.05 | 0.17 | 788526 | 960103 |
| EUR/INR | 70.44 | -0.82 | 37048 | 48836 |
| GBP/INR | 100.46 | 0.07 | 21059 | 41217 |
| JPY/INR | 53.62 | -0.64 | 7908 | 15311 |
