- Lack of Powell pushback supports risk appetite
- ECB and Fed continue hawkish rhetoric
- Inflation in Australia continues to climb
* Daily move - against G10 rates at 17:00pm, 10.01.23
** Indicative rates - interbank rates at 17:00pm, 10.01.23
EUR – ECB’s De Cos, Holzmann, Rehn, and Villeroy
Following the lack of pushback from Fed Chair Powell, markets continue to seek risk on the China re-opening story, and following the weaker wage figures from the US which suggest that perhaps there are some cracks in the US job market. The gauge of USD (The US dollar index) is now at a 7-month low. All eyes will be on tomorrow's inflation print for the US to see how markets perform for the rest of the month. Until then, it seems we’ll see continued bias for risk, and thus weaker USD.
The dollar's recent losses have been in focus, and on a technical basis we have seen price action trade below both the 50-day and 200-day moving average.
Now however, we have the threat of the 50-day average crossing lower than the 200-day moving average, the so-called “death-cross”, as well as dollar price action coming to the supportive two-year trend line. Thursday's CPI data, whilst not determining the overall trend or direction in inflation, could well be pivotal on the dollar's two-year uptrend breaking….. or continuing.
Source: Bloomberg Finance L.P.
Have a great day.