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Greenback on Steadier Footing After Waller Talks Down CPI Hopes

FOREX
  • The dollar is firmer for the first session in three, with the USD Index recovering back to the 107.00 handle as recent price action stabilises. Comments from Fed's Waller proved USD supportive, stating that the FOMC need to see more than just a single lower CPI print before being comfortable that inflation is in decline. Waller added that "The market seems to have gotten way out in front on this".
  • Background USD strength is keeping EUR/USD support at the 1.03 handle under pressure, with a break below opening retracement toward 1.0217, the 23.6% Fib for the November upleg.
  • The JPY is the poorest performer in G10 amid solid performance for Asia-Pac equity markets after Chinese authorities moved to support the local property market. Regulators rolled out a series of 16 policy measures including liquidity support to looser pre-payment conditions. USD/JPY remains in range of the 100-dma at 140.82, the first upside level of note.
  • Datapoints are few and far between Monday, with focus instead on the speaker slate. ECB's Centeno, de Guindos, Brainard and Williams are due as well as Nagel speaking in a Bundesbank capacity.

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