The US dollar (USD) lost some of its luster on Monday amid renewed concerns about the Fed’s independence as investors began to picture a (more?) dovish Fed stance in the coming months. Caution among market participants also appeared before Tuesday’s publication of key CPI indicators in the US.
Here’s what to watch on Tuesday, January 13:
The US Dollar Index (DXY) came under novel selling pressure, leaving after four consecutive days of gains and briefly falling back to the 98.70 area. The focus will be on the inflation rate, which will be accompanied by the NFIB Business Optimism Index, ADP Employment Change Weekly, New Home Sales and the RCM/TIPP Economic Optimism Index. Additionally, Fed representatives Williams, Musalem and Barkin will speak.
EUR/USD has found some respite from its recent edged pullback, approaching the 1.1700 barrier. Next on the national calendar will be data on full-year GDP growth in Germany, followed by industrial production and the trade balance in wider Europe, with all data due on January 15.
GBP/USD rose sharply, mainly in response to renewed dollar weakness, bringing it back into focus at the 1.3500 level. The BRC Retail Sales Monitor report will be released next across the English Channel.
USD/JPY strengthened, breaching the 158.00 barrier once again amid a broad-based improvement in the risk elaborate. Current account results will be published alongside bank lending data and the Eco Watchers survey.
AUD/USD recovered some of its recent weakness and managed to reclaim the key 0.6700 barrier. The Westpac Consumer Confidence Index will be the next one available in Oz.
WTI prices were higher earlier this week amid uncertainty over potential supply disruptions in Iran, while investors continued to assess developments in Venezuela.
On Monday, gold prices rose for the third day in a row, reaching an all-time high of $4,630 per troy ounce. The raise in prices of the precious metal occurred as a result of renewed selling pressure from the US dollar and geopolitical recovery in the Middle East. Silver prices followed suit and crossed the $85.00 per ounce mark for the first time in history.
