Currency converter euro to dollar by date12/30/2023 Therefore, a stronger reading could dampen risk appetite, strengthen the US dollar, and prompt traders to reassess their expectations of an earlier-than-expected rate cut in 2024.Ī +0.2% reading or lower would likely align with the current market narrative of peaking interest rates and a potential rate cut in the first half of 2024, potentially weakening the US dollar and supporting the EUR/USD. The core PCE is typically the Fed's preferred inflation metric due to its lower volatility compared to traditional CPI measures. ![]() ![]() This is pivotal for maintaining the belief that the Fed might lower interest rates in the first half of the coming year. Given that the US headline CPI fell below expectations, traders are keen to see if this weakening inflationary trend persists in the upcoming PCE figures. On Thursday, the core PCE price index is set to be unveiled. The question now is whether a similar reaction will occur this time, or if the markets are more attuned to forward-looking data, considering the GDP is a couple of months old. The previous estimate surpassed expectations, resulting in a positive response to the US dollar. Should there be a notable revision from the initial 4.9% annualized growth reported last month, it may well influence the EUR/USD’s trajectory. The preliminary estimate for the US GDP in the third quarter is slated for release on Wednesday. Investors will be looking ahead to a key week for data, with inflation figures from both the eurozone and the US, as well as GDP and a few other US macro pointers, all to come.ĮCB president Christine Lagarde on Friday said that the fight against inflation is still not over, even though no more rate hikes are expected, a message she’s likely to re-iterate at her speech on Monday. US Dollar Will Be Put Under the Spotlight By GDP and Core PCE Inflation Data Last week for example saw the PMI data surprised to the upside, if still in the contraction territory, while the German Ifo business climate rose for the second consecutive month. Meanwhile, European data has started to show some signs of stabilization. With global stock markets also being excited by the possibility of central banks adopting a more dovish stance moving forward, with signs of global inflationary pressures slowly moving to normal levels around the world, this is also helping to keep the dollar under pressure, boosting the appetite for foreign currencies. The dollar edged lower last week following a big drop the week before, when softer-than-expected CPI and PPI figures poured cold water on recent hawkish Fed comments, keeping yields under pressure. The odds of a cut in May are nearing 50% probability, as per the CME Group’s FedWatch tool. The US dollar has been weakening across the board as the market becomes increasingly convinced that the next move from the US central bank will be to cut interest rates, possibly as early as the second quarter. ![]() As we enter the final week of November, will it be able to extend those gains to 500 pips, and potentially set the stage for further follow-up gains in December? EUR/USD Outlook Supported by Weakening US Dollar It has been a good month for the EUR/USD, rising nearly 450 pips (4.25%) from the lowest to the highest point of the month so far. The EUR/USD’s upward drift continues as it edges ever closer to the 1.10 handle, now just 50 pips shy of that psychological barrier.
0 Comments
Leave a Reply.AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |