Should We Be Wary of the U.S. Dollar's Unrelenting Decline?
14.01.2022
- U.S. Import Price Index
- U.S. Industrial Production
Yesterday, the three major U.S. stock indices all fell, resulting in a full-blown risk-off market characterized by falling stock prices, falling crude oil prices, and falling interest rates. Gold also fell back to 1,724, and BTC/USD is similarly trending lower. The yield on the 10-year U.S. Treasury note has fallen to 1.72%.
In the foreign exchange market, the U.S. dollar has lost momentum due to a decline in the Dollar Index. The EUR/USD pair has risen and is testing resistance near its recent highs.The EUR/USD pair is currently trading around 1.147 and continues to find support at the 20-period moving average (MA) on the hourly chart. From a technical perspective, since there are no key resistance levels until the 1.159 mark—near the 200-period exponential moving average (EMA) on the daily chart—we should monitor the situation carefully to see if the upward trend will continue.
Today’s schedule includes the UK GDP and UK trade balance at 16:00 European time, the French Consumer Price Index (final reading) at 16:45, and the Eurozone trade balance at 19:00; followed by remarks by ECB President Lagarde at 22:30 U.S. time, U.S. retail sales,U.S. Import Price Index, at 23:15 U.S. Industrial Production and U.S. Capacity Utilization, at 24:00 U.S. University of Michigan Consumer Sentiment Index (Preliminary), U.S. Business Inventories, and at 25:00 remarks by U.S. Federal Reserve Bank of New York President Williams.We should pay close attention to the direction of the U.S. dollar, as its downward momentum shows no signs of stopping.
Author: Keisuke Sakurai
