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Greenback Surges On Firmer-Than-Expected US CPI, Swiss Franc Slides

FOREX
Energy BulletsCommodities
  • Hotter-than-expected US inflation data prompted a surge higher for the greenback on Tuesday. As Fed rate cut expectations continue to be pushed back, the USD index remains at the best levels of the session as we approach the APAC crossover, having risen 0.72% to a fresh near-three month high.
  • Kiwi remains among the worst performers on Tuesday with multiple themes helping NZDUSD (-1.25%) to slide back towards the 0.6050 mark, and the worst levels of the year. Weakness was initiated overnight after RBNZ’s Q1 inflation expectations eased further making any further RBNZ tightening unlikely. The firm dollar and significant weakness for equities exacerbated the NZDUSD decline.
  • USDJPY has continued to inch higher across the session, piercing initial resistance in late trade above 150.78, the November 17 high. This extends the intra-day advance to 1.00%, with yield differentials the primary driver following the hot US inflation figures.
  • With price now firmly above the psychological 150.00 mark and edging towards last years highs, market participants may once again be cautious of any verbal warnings from the Ministry of Finance, who will no doubt be wary of the impressive 7% advance this year.
  • CHF is also among the poorest performer so far, slipping against all others as Swiss CPI also came in soft relative to expectations. The release prompted an extension of recent EUR/CHF gains, putting the cross well through the mid-January highs and above key resistance at the 100-dma of 0.9496. USDCHF rose an impressive 1.35%.
  • Wednesday’s data focus will be on UK CPI, after the higher-than-expected earnings data this morning. Fed speakers include Chicago Fed Goolsbee and Fed VC Barr.
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  • Hotter-than-expected US inflation data prompted a surge higher for the greenback on Tuesday. As Fed rate cut expectations continue to be pushed back, the USD index remains at the best levels of the session as we approach the APAC crossover, having risen 0.72% to a fresh near-three month high.
  • Kiwi remains among the worst performers on Tuesday with multiple themes helping NZDUSD (-1.25%) to slide back towards the 0.6050 mark, and the worst levels of the year. Weakness was initiated overnight after RBNZ’s Q1 inflation expectations eased further making any further RBNZ tightening unlikely. The firm dollar and significant weakness for equities exacerbated the NZDUSD decline.
  • USDJPY has continued to inch higher across the session, piercing initial resistance in late trade above 150.78, the November 17 high. This extends the intra-day advance to 1.00%, with yield differentials the primary driver following the hot US inflation figures.
  • With price now firmly above the psychological 150.00 mark and edging towards last years highs, market participants may once again be cautious of any verbal warnings from the Ministry of Finance, who will no doubt be wary of the impressive 7% advance this year.
  • CHF is also among the poorest performer so far, slipping against all others as Swiss CPI also came in soft relative to expectations. The release prompted an extension of recent EUR/CHF gains, putting the cross well through the mid-January highs and above key resistance at the 100-dma of 0.9496. USDCHF rose an impressive 1.35%.
  • Wednesday’s data focus will be on UK CPI, after the higher-than-expected earnings data this morning. Fed speakers include Chicago Fed Goolsbee and Fed VC Barr.