| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 07:00 | Germany | CPI, y/y | December | 3.2% | 3.7% | 3.7% |
| 07:00 | United Kingdom | Average Earnings, 3m/y | November | 7.2% | 6.8% | 6.5% |
| 07:00 | United Kingdom | ILO Unemployment Rate | November | 4.2% | 4.2% | 4.2% |
| 07:00 | United Kingdom | Claimant count | December | 0.6 | 18.1 | 11.7 |
During today's Asian trading, the US dollar rose significantly against major currencies, reaching its highest level since December 13, while investors thought more clues on the timing for a US interest-rate cut. Fears of new attacks on ships in the Red Sea also contributed to the growth in demand for the dollar.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.54% to 102.96. According to experts, the dollar is likely to find support if markets reassess easing expectations and push short-term interest rates higher. Investors are awaiting a speech by Federal Reserve Governor Christopher Waller (at 16:00 GMT) after the Chair Jerome Powell gave the clearest signal yet that a series of rate cuts were in the pipeline for 2024. According to the CME FedWatch Tool, markets see a 66.3% probability of a 25 basis point rate cut at the Fed meeting in March and a 100% probability of a rate cut in May, with approximately 160 basis points of cuts priced in for this year.
The euro fell 0.3% against the US dollar as investors reacted to yesterday's statements by ECB policymakers who opposed an early rate cut. Joachim Nagel, ECB Governing Council member and president of the central bank of Germany, said It's too early to talk about cuts, as inflation is too high. He added that the mistake of lowering interest rates too early should be avoided. Money markets are now estimating a 1.45% reduction in the ECB deposit rate in 2024, most likely starting in April.
The yen fell by 0.3% against the US dollar on the back of Japan's inflation data, which takes pressure off the Bank of Japan to phase out massive stimulus soon. The report showed that the wholesale price index was unchanged in December from a year ago, slowing for the 12th straight month.