By ForexTime
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Our attention falls on FXTM’s USDInd which could be rattled by key US data and Fed speeches including Jerome Powell.
Besides, it would be a crime to overlook the index after its aggressively bullish reaction to Trump’s US election win. Prices jumped almost 2% mid-week on the “Trump trade” before giving back post-election gains as the Pound and Yen gained.
The Federal Reserve also contributed to the USDInd recent weakness after cutting interest rates by 25 basis points to 4.5%.
The USDInd tracks the dollar’s performance against a basket of six different G10 currencies, including the Euro, British Pound, Japanese Yen, and Canadian dollar.
With all the above said, the USDInd could see more price swings. Here are 3 reasons why:
The October US Consumer Price Index (CPI) report published on Wednesday 13th November could impact Fed cut bets for December and beyond.
Markets are forecasting:
Headline and core CPI inflation is expected to remain unchanged at 0.2% and 0.3% MoM in October, but the year-over-year headline number is expected to rise 2.6% from 2.4%.
Over the past 12 months, the USCPI has triggered upside moves of as much as 0.7% or declines of 0.6% in a 6-hour window post-release.
Further evidence of cooling price pressures may support the case for another rate cut in December.
Traders are currently pricing in a 74% probability of another 25 basis point rate cut by the end of 2024.
A string of key US economic data and speeches by numerous Fed officials could result in more volatility for the USDInd.
Investors will direct their attention towards the latest US retail sales report, Producer Prices Index (PPI), and initial jobless claims among other data to gauge the health of the US economy. Speech by various Fed officials including Jerome Powell on Thursday may offer fresh insight and clues on the Fed’s next move.
The USDInd remains in an uptrend on the daily charts but bulls and bears seem entangled in a fierce tug of war. Prices are trading above the 50, 100 and 200-day SMA but the Relative Strength Index (RSI) is trading near overbought levels.
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