Dollar Muted Despite Strong PPI, Awaits Reciprocal Tariffs
| Action Insight Mid-Day Report 2-13-25 |
Dollar Muted Despite Strong PPI, Awaits Reciprocal Tariffs |
The currency markets are treading cautiously, with traders showing little reaction to stronger-than-expected US PPI data and a better-than-anticipated jobless claims report. Despite these inflationary signals, Dollar has struggled to gain further traction, as market participants hold their positions ahead of a highly anticipated announcement on US "reciprocal tariffs" from President Donald Trump. The announcement, expected later today in a news conference at the Oval Office, could provide a clearer picture of how US trade policy will evolve and its impact on global markets. While Fed’s restrictive stance on interest rates remains intact, this week's hot CPI and PPI data suggest that inflation is proving more persistent than policymakers had hoped. Chair Jerome Powell has already reinforced that Fed is in no hurry to cut rates, and expectations for rate reductions in the first half of the year have now diminished. Market focus will now shift to upcoming US retail sales figures and additional comments from Fed officials, as traders assess how these data points might influence the central bank’s next policy moves. Sterling briefly found some boost after stronger-than-expected UK GDP data, which helped ease immediate concerns over a recession. However, the currency’s gains were short-lived, as investors remain cautious about the country’s sluggish economic outlook. While BoE has signaled a path of gradual easing, the market are more conservative than BoE guidance, with traders still pricing in just two rate cuts before year-end. Given the uncertainty around inflation and growth, the pace of BoE rate cuts will remain a key point of debate in the coming months..... |
GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.2387; (P) 1.2435; (R1) 1.2493; More... Outlook in GBP/USD is unchanged and intraday bias stays neutral. Corrective rebound from 1.2099 could still extend higher. But upside should be limited by 38.2% retracement of 1.3433 to 1.2099 at 1.2609. On the downside, below 1.2331 minor support will turn bias to the downside for 1.2248 support. Firm break there will argue that the correction has completed and bring retest of 1.2099 low. However, decisive break of 1.2609 will raise the chance of near term reversal, and target 61.8% retracement at 1.2923. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
|---|
| 23:50 | JPY | PPI Y/Y Jan | 4.20% | 4.00% | 3.80% | 3.90% | | 00:00 | AUD | Consumer Inflation Expectations Feb | 4.60% | 4.00% | | 00:01 | GBP | RICS Housing Price Balance Jan | 22% | 27% | 28% | 26% | | 02:00 | NZD | RBNZ Inflation Expectations Q1 | 2.06% | 2.12% | | 07:00 | EUR | Germany CPI M/M Jan F | -0.20% | -0.20% | -0.20% | | 07:00 | EUR | Germany CPI Y/Y Jan F | 2.30% | 2.30% | 2.30% | | 07:00 | GBP | GDP Q/Q Q4 P | 0.10% | -0.10% | 0.00% | | 07:00 | GBP | GDP M/M Dec | 0.40% | 0.10% | 0.10% | | 07:00 | GBP | Industrial Production M/M Dec | 0.50% | 0.30% | -0.40% | -0.50% | | 07:00 | GBP | Industrial Production Y/Y Dec | -1.90% | -2.10% | -1.80% | | 07:00 | GBP | Manufacturing Production M/M Dec | 0.70% | 0.10% | -0.30% | | 07:00 | GBP | Manufacturing Production Y/Y Dec | -1.40% | -1.90% | -1.20% | -1.10% | | 07:00 | GBP | Goods Trade Balance (GBP) Dec | -17.4B | -18.3B | -19.3B | -18.9B | | 07:30 | CHF | CPI M/M Jan | -0.10% | -0.10% | -0.10% | | 07:30 | CHF | CPI Y/Y Jan | 0.40% | 0.40% | 0.60% | | 09:00 | EUR | ECB Economic Bulletin | | 10:00 | EUR | Eurozone Industrial Production M/M Dec | -1.10% | -0.60% | 0.20% | 0.40% | | 13:30 | USD | PPI M/M Jan | 0.40% | 0.20% | 0.20% | 0.50% | | 13:30 | USD | PPI Y/Y Jan | 3.50% | 3.20% | 3.30% | | 13:30 | USD | PPI Core M/M Jan | 0.30% | 0.30% | 0.00% | | 13:30 | USD | PPI Core Y/Y Jan | 3.60% | 3.30% | 3.50% | | 13:30 | USD | Initial Jobless Claims (Feb 7) | 213K | 221K | 219K | 220K | | 15:30 | USD | Natural Gas Storage | -90B | -174B |
|
|
|
