Forecasting the upcoming week: Inflation is the key to the FX market next week
The US Dollar (USD) lacked directional momentum this week amid geopolitical and local uncertainty. On the one hand, the United States (US) President Donald Trump continued threatening Iran with military interventions, taking down the tone by the week’s end, but noting that all options are still on the table. On the other hand, the Federal Reserve (Fed) is facing problems stemming from the lawsuit against Chairman Jerome Powell, keeping the USD unattractive to investors.
USD Index: the US Dollar Index (DXY) ended the week with modest gains and is trading near 99.30, reaching a monthly high.
On the datafront, the US will release the ADP Employment Change four-week average and Initial Jobless Claims next week.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | -0.10% | -0.41% | 0.11% | 0.17% | -0.28% | -0.22% | |
| EUR | 0.02% | -0.09% | -0.39% | 0.13% | 0.19% | -0.25% | -0.20% | |
| GBP | 0.10% | 0.09% | -0.30% | 0.22% | 0.28% | -0.17% | -0.11% | |
| JPY | 0.41% | 0.39% | 0.30% | 0.55% | 0.59% | 0.14% | 0.20% | |
| CAD | -0.11% | -0.13% | -0.22% | -0.55% | 0.04% | -0.41% | -0.34% | |
| AUD | -0.17% | -0.19% | -0.28% | -0.59% | -0.04% | -0.45% | -0.38% | |
| NZD | 0.28% | 0.25% | 0.17% | -0.14% | 0.41% | 0.45% | 0.06% | |
| CHF | 0.22% | 0.20% | 0.11% | -0.20% | 0.34% | 0.38% | -0.06% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD: The EUR/USD pair is trading near the 1.1620 price zone, losing some ground by the end of the week. The Eurozone Harmonized Index of Consumer Prices (HICP) and Core HICP are scheduled to be published by Monday. German Producers Price Index, along with the ZEW survey, both for Germany and the Eurozone, will be released on Tuesday.
GBP/USD: The GBP/USD pair is trading near 1.3400, seeing significant movement throughout the week but ending on a muted note. The United Kingdom (UK) Producer Price Index (PPI) and core PPI outputs will be released on December 21 alongside the Retail Price Index.
USD/JPY: The USD/JPY pair is trading near the 158.00 price zone, ending the week with little movement, as investors are wary of the upcoming Bank of Japan (BoJ) monetary policy decision on December 23.
USD/CAD: The USD/CAD pair is trading near the 1.3910 price zone, ending the week on a muted tone as investors await the Bank of Canada (BoC) Consumer Price Index (CPI) and Core CPI to be released on December 19.
Gold: The XAU/USD pair is trading at $4,620, posting an all-time high of $4,643 earlier in the week.
Anticipating economic perspectives: Voices on the horizon
- SNB Schlegel will be opening the World Economic Forum in Davos on December 20.
- ECB President Lagarde will be speaking on December 21.
- President Trump will deliver a speech on December 21.
- ECB Nagel will speak on December 21.
- ECB Lagarde will give a speech on December 23.
Central banks: Upcoming meetings/releases to shape monetary policies
- China's GDP, Industrial Production, and Retail Sales on December 19.
- BoC Consumer Price Index Core and Canadian CPI on December 19.
- UK Employment data to be released on December 20.
- UK CPI to be released alongside the PPI on December 21.
- Australian Employment data will be released late on December 21.
- US GDP and PCE will be released on December 22.
- NZ CPI will be released on December 22.
- The BoJ's interest rate decision (current 0.75%) and the Monetary Policy statement will be released on December 23.
Nothing in this material constitutes investment advice, personal recommendation, investment research, an offer, or a solicitation to buy or sell any financial instrument. The content has been prepared without consideration of your individual investment objectives, financial situation, or needs, and should not be treated as such.
Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
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