Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

U.S. Dollar: Rose On Inflation Data And Fed Comments, Stays Firm

Published 02/27/2015, 03:09 AM
Updated 03/09/2019, 08:30 AM

The US dollar jumped overnight as lifted by stronger than expected core inflation data as well as comments from Fed officials. San Francisco Fed John Williams said in an interview that the first rate hike could happen "this summer or this fall" if data come out as he expected. Meanwhile, he's also optimistic that US will release full employment by the end of this year and inflation will reach 2% level by the end of next year.

He noted that Fed should start raising rates before that. Meanwhile, St Louis Fed James Bullard said Fed should drop the word "patient" in the next FOMC statement to give it flexibility to hike rates in Summer. He said he'd be "for starting a little bit earlier on the normalization process. It's not tightening." Also, he noted that today's inflation data showed the core "being a little hotter" than expected and would "bolster confidence a little bit" that inflation is heading back towards target.

Meanwhile, he noted that even if Fed starts to hike rate, that's only "normalization" rather than "tightening" as Fed still have very accommodative policy. Also, Bullard said that labor markets are "improving so rapidly". And it would "seems like a bit little extreme" if unemployment drops below 5% and Fed still keeps rate near zero.

The dollar's rise suggests that the triangle consolidation from 95.48 could have completed at 94.05 already. We'll stay cautiously bullish as long as 94.05 holds and expect a break of 95.48 resistance today or early next week. In that case, the dollar index should have a test on next key long term fibonacci level at 50% retracement of 121.01 to 70.69 at 95.85 next.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

US dollar Index chart

Released from Asian session, Japan national CPI slowed to 2.2% yoy in January, below expectation of 2.3% yoy. Tokyo CPI was unchanged at 2.2% yoy in February as expected. Unemployment rate rose to 3.6% in January, industrial production dropped -2.0% yoy, household spending dropped -5.1% yoy. From New Zealand, building permits dropped -3.8% mom in January, NBNZ business confidence rose to 34.4. UK Gfk consumer sentiment was unchanged at 1 in February.

Looking ahead, German CPI and Swiss KOF leading indicator will be the main focus in European session. US Q4 GDP revision, Chicago PMI and pending home sales will be featured in US session.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.