- EUR/USD is in a rangebound territory as solid yields are weighing on risk-perceived currencies.
- The release of the US PPI will provide more cues about inflation projections.
- According to Bloomberg’s poll, the ECB is expected to find an interest rate peak at 3.25%.
The EUR/USD pair has continued to trade rangebound near 1.0830 in the Asian session. The major currency pair is displaying a lackluster performance amid ambiguity in the risk profile as the United States markets will open on Tuesday after a stretched weekend. A volatility contraction in the asset is likely to get exploded ahead.
S&P500 futures have shown a marginal loss as investors have turned anxious amid after holiday mood. The US Dollar Index (DXY) has sensed barricades after testing Monday’s high at 102.20. The USD Index is putting efforts in sustaining above the critical support of 102.00. Meanwhile, the 10-year US Treasury yields have escalated further to near 3.54%, weighing on the risk-appetite theme.
Investors should brace for a power-pack action after the release of the United States Producer Price Index (PPI) data. A change in the prices of goods and services at factory gates is going to provide more cues about inflation projections. The street sees a decline in headline factory gate prices of goods and services (Dec) to 6.8% from the former release of 7.4%. Also, the core PPI might trim to 5.9% from the former release of 6.2% in a similar period.
The Euro is expected to hog the limelight as the European Central Bank (ECB) is aiming to achieve the interest rate peak by the Summer.
A poll from Bloomberg indicates that ECB President Christine Lagarde is expected to push interest rates to 3.25%. The central bank will announce 50 basis points (bps) interest rate hike in February and March and a 25 bps rate hike in May that will support the ECB in achieving a terminal rate from the current rate of 2%.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
