Previous Trading Days Events 11 Jan 2024

The U.S. Inflation report shook the markets yesterday affecting major FX pairs and related major assets such as Gold. A higher than expected figure triggered an intraday shock followed by high levels of volatility. Prices seem to show a turn to the upside puzzling both the Fed and investors. Policymakers might review their expectations and start cutting interest rates later than when they intended.

The monthly Inflation figure rose 0.3 in December after increasing 0.1 in November.  The yearly Inflation figure rose 3.4, more than the 3.2 forecast.

U.S. central bankers want more confirmation that inflation is going toward their 2 goal before they reduce the policy rate, now in the 5.255.5 range.

The upshot of todays inflation report is that the inflation dragon, while maimed, has yet to be slain, said Jason Pride, Chief of Investment Strategy and Research at Glenmede.

The dollar index, remarkably, remained stable after a quite volatile trading day. Oneside direction movements did not hold for most assets.

Source httpswww.reuters.commarketsustradersparebetsfedwillcutratesmarchafterinflationdata20240111

Winners vs Losers

EURJPY remains on the top of the winners list for the week with 0.52 gains.  Even though the USD strengthened remarkably after the U.S. Inflation report, soon after it experienced heavy depreciation against other currencies. The dollar index reversed fully back to the downside closing almost flat.

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