The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
Important releases for the USD
The United States will publish its PPI and core PPI on December 11, at 15:30 MT time.
Instruments to trade: EUR/USD, USD/JPY, GBP/USD
Producer Price Index (PPI) is an indicator of inflation. In general, we follow the change in the price of finished goods and services by producers. Bigger charges by producers lead to higher costs for consumers. Therefore, inflation rises. Last time, US PPI advanced by 0.3% (vs. the forecast of +0.2%). As for its core level, which excludes food and energy prices due to their disturbing impact, it increased by a lower-than-expected 0.1%. The USD had limited reaction because of more global events affecting it. However, if the data surprises, we may see the short-term upside momentum this time.
- If the indicators are higher than the forecasts, the USD will go up;
- If the indicators are lower than the forecasts, the USD will go down.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.