🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

Dollar slips ahead of U.S. CPI release; yen gains on Ueda appointment

Published 02/14/2023, 03:32 PM
© Reuters.
EUR/USD
-
GBP/USD
-
USD/JPY
-
AUD/USD
-
USD/CNY
-
DXY
-

By Peter Nurse

Investing.com - The U.S. dollar retreated in early European trade Tuesday ahead of the latest readout of U.S. consumer inflation, while the yen gained upon the nomination of the next governor of the Bank of Japan. 

At 02:10 ET (07:10 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% lower at 103.028.

The dollar has traded in something of a holding pattern over the last few days as traders awaited the release of the latest U.S. consumer price index, which could provide further clues on the Federal Reserve's policy outlook.

The U.S. central bank earlier this month raised interest rates by 25 basis points, tempering the pace of its rate hikes, but the bank’s policymakers were keen to say that the fight against inflation continues and further increases should be expected.

Attention thus turns to today’s January inflation report, with the headline number expected to show that consumer prices rose at an annual pace of 6.2% in January, down from 6.5% in December and well below June's four-decade peak of 9.1%. 

That said, markets are also wary of any potential bigger-than-expected surprises in core inflation, which excludes volatile energy and food prices, as the labor market remains strong, potentially powering wage growth.

Elsewhere, USD/JPY fell 0.3% to 132.04, following the nomination of Kazuo Ueda to be the next governor of the Bank of Japan.

Ueda, a former BOJ policy board member but currently an academic, was not seen as being anywhere close to the top job before speculation started swirling late last week.

Thus, he is seen as something of an outsider who is not necessarily committed to the central bank’s current ultra-easy policy.

That said, data released earlier Tuesday showed Japan's economy rebounded much less than expected in the fourth quarter, climbing 0.6% instead of the expected 2.0%, after falling a revised 1.0% in the July-September period.

EUR/USD traded 0.2% higher at 1.0737, ahead of the release of the latest iteration of growth data for the region. 

The European Commission lifted its economic forecasts for the EU on Monday, saying the bloc will likely dodge a recession thanks in part to a dip in gas prices.

GBP/USD rose 0.2% to 1.2161, after the release of the latest U.K. labor data showed a drop of almost 13,000 in the claimant count in January, suggesting the labor market remains strong despite the country’s economic difficulties.

AUD/USD edged 0.1% higher to 0.6972, while USD/CNY fell 0.1% to 6.8158, with the yuan benefiting from the dollar's weakness.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.