US CPI Up Next
USD Higher Ahead of CPI
The US dollar has started the day in the green with the index rallying up to 97.16 as of writing. Looking ahead today, US CPI data is the main data print today. The headline reading is expected to have grown at just 0.2% last month down from the prior month’s 0.3% reading.
A print in this region might not do much to detract from USD strength at this point though any downside miss could see USD selling kick in. On the other hand, a strong reading could see the 97.26 resistance level give way.
Euro Under Pressure
EURUSD has been lower today, weighed on by strength in USD. Despite the pullback today, EURUSD is still up off the January lows, trading 1.1130 last. Looking over the rest of the week, the December ECB minutes on Thursday will be the main focus point. If the minutes show there is still strong support or further easing, this could push EUR lower in the near term.
GBP Lower Following GDP Miss
GBPUSD is lower again today following yesterday’s release of lower-than-expected growth numbers. The BOE has warned that a rate cut might be necessary given the subdued level of growth amidst fears that a post-Brexit pickup is now looking less likely. GBPUSD trades 1.2968 last, testing the local supporting trend line.
SPX500 Still Near Highs
Risk assets have had a choppy start to the morning with the SPX500 trading lower initially before reversing. The signing of the US/China trade deal this week should keep risk appetite supported as traders wait on the news of the beginning of the next round of trade negotiations. Today’s US CPI reading could also cause some volatility in the SPX if we see any surprise reading.
JPY & Gold Weaker
Safe havens have been lower this morning with the rally in USD, as well as recent strength in equities, seeing both JPY and gold lower against USD. XAUUSD trades 1543.25 last, having broken back below the 1556.75 level. USDJPY trades 110.03 last, having broken above the 109.71 level which has been firm resistance over recent months.
Crude Lower Again
Oil prices have been a little lower again today over early European trading. The fall back in risks relating to possible military conflict between the US and Iran has weighed heavily on oil prices over the last week seeing price falling from around 65 to current levels around 58. Today, the API will report on last week’s US crude inventory levels ahead of tomorrow’s headline EIA release.
Loonie Breaks Resistance
USDCAD has been higher today, with price breaking out above the 1.3068 level. The rally in USD, as well as weakness in crude prices, is keeping CAD weighed down. Today’s US CPI reading offers the potential for some volatility as does the API crude report. For now, near term bias reams bullish.
Aussie Weaker Against USD
AUDUSD has been lower against USD today. The rally in USD, as well as heightened expectations of an RBA rate cut, are keeping the AUDUSD outlook bearish in the near term. For now, price is trading .69, towards the top of the .6850 – .6926 range.