Dollar in Anticipation Ahead of U.S. Inflation Data Release
The anticipation surrounding U.S. inflation data and trade policies halted the dollar's upward trend during Wednesday's trading, amid growing concerns about the impact of tariffs on global economic growth.
Dollar Movements in Asian Markets
In Asian trading, the dollar rose by 0.7% to reach 153.56 yen, surpassing its 200-day moving average. However, it saw a slight decline against most other currencies, registering $1.0358 per euro, according to Reuters data.
Federal Reserve Policy and Its Impact on U.S. Yields
Jerome Powell, Chairman of the Federal Reserve, reaffirmed his cautious stance on cutting interest rates during his testimony before Congress. This position led to a four basis point increase in U.S. 10-year Treasury yields, reflecting continued market anticipation.
Anticipation of U.S. Inflation Data
All eyes are on the upcoming U.S. Consumer Price Index (CPI) data, set to be released at 13:30 GMT. According to a Reuters poll of economists, core inflation is expected to rise by 0.3% in January, which could influence the direction of U.S. monetary policy.
Performance of Major Currencies
British Pound: Held steady around $1.2441 after rising 0.7% on Tuesday. Australian Dollar: Made marginal gains, reaching $0.6291. Canadian Dollar: Strengthened due to tariff influences, nearing its highest level of the year at 1.4295 per dollar, despite a White House official confirming that steel tariffs would include an additional 25% duty on imports from Mexico and Canada. Mexican Peso and Emerging Market Currencies: Remained under pressure, hovering near recent lows.
Concerns Over Tariff Implications
Uncertainty about the effects of tariffs and countermeasures has raised investor concerns, leading to increased caution in the market. Analysts note that the impact of inflation remains unclear, making it challenging to predict economic developments.
Conclusion
Global markets remain on edge, awaiting U.S. inflation data and the impact of trade policies on economic growth. These factors are expected to play a crucial role in shaping the direction of major currencies in the coming period.
