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US Dollar holds steady ahead of key inflation data

Here is what you need to know on Tuesday, March 12:

The action in financial markets remain relatively slow in the European morning on Tuesday. The US Dollar (USD) Index holds steady slightly below 103.00 after posting small gains on Monday and the 10-year US Treasury bond yield fluctuate at around 4.1% as investors gear up for the February Consumer Price Index (CPI) data release. 

In the absence of high-tier data releases, the cautious market mood helped the USD stay resilient against its rivals at the beginning of the week. Annual inflation in the US, as measured by the change in the CPI, is forecast to hold steady at 3.1%. The annual Core CPI is expected to rise 3.7% in the same period, down from the 3.9% increase recorded in January. In the meantime, US stock index futures are up between 0.2% and 0.6% in the early European session, pointing to a positive shift in risk mood.

US CPI data Forecast: Core inflation set to cool further, adding to expectations of Fed policy pivot.

US Dollar price this week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.

USD   0.05% 0.38% -0.08% 0.09% 0.42% 0.14% -0.09%
EUR -0.04%   0.34% -0.13% 0.05% 0.38% 0.11% -0.12%
GBP -0.38% -0.33%   -0.47% -0.26% 0.05% -0.24% -0.44%
CAD 0.09% 0.13% 0.46%   0.19% 0.49% 0.22% 0.02%
AUD -0.07% -0.02% 0.30% -0.17%   0.34% 0.07% -0.16%
JPY -0.39% -0.36% 0.21% -0.50% -0.31%   -0.26% -0.50%
NZD -0.12% -0.07% 0.25% -0.22% -0.04% 0.29%   -0.21%
CHF 0.08% 0.13% 0.46% -0.01% 0.17% 0.48% 0.22%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).


While speaking before the Parliament on Tuesday, Bank of Japan (BoJ) Governor Kazuo Ueda said that they will seek to exit from negative rate, yield curve control and other large scale monetary easing steps once they have the achievement of 2% inflation “stably and sustainably in sight.” After closing six consecutive trading days in negative territory, USD/JPY turned north in the Asian session and was last seen trading in positive territory slightly below 147.50.

Japanese Yen sticks to heavy intraday losses against USD, eyes US CPI for fresh impetus.

The National Australia Bank’s Business Confidence Index declined to 0 in February from 1 and the Business Conditions Index improved to 10 from 7. AUD/USD showed no reaction to these data and extended its sideways grind above 0.6600 during the Asian trading hours.

Australian Dollar stabilizes as the ASX 200 rises, with markets awaiting US CPI data.

GBP/USD fell 0.35% on Monday and snapped a six-day winning streak. The pair struggles to gain traction early Tuesday and trades in a narrow channel at around 1.2800. The UK’s Office for National Statistics announced that the ILO Unemployment Rate edged higher to 3.9% in the three months ending in January. Employment Change was down 21K following the 72K increase recorded previously. Finally, the wage inflation, as measured by Average Earnings Excluding Bonus, ticked down to 6.1% from 6.2%. 

EUR/USD registered small losses for the second consecutive trading day on Monday. The pair clings to small recovery gains early Tuesday but trades below 1.0950.

Gold failed to gather directional momentum and ended the first trading day of the week virtually unchanged. XAU/USD stays in a consolidation phase in the European morning and trades marginally lower on the day below $2,180.

Gold price keeps the red below $2,180 level, downside seems limited ahead of US CPI.

Read More: US Dollar holds steady ahead of key inflation data

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