Investors should be on the lookout for increased volatility following the release of economic indicators in the U.S.

Investors should be on the lookout for increased volatility following the release of economic indicators in the U.S.

06.01.2023

The U.S. dollar emerged as the strongest currency the previous day, driven by strong U.S. economic data.Yesterday, Kansas City Fed President George stated in a CNBC interview that "the Fed should maintain the policy rate above 5% even into 2024," dampening excessive expectations for rate cuts. This contributed to the GBP/USD pair falling 200 pips from 1.2076 to 1.1873.

European currencies weakened as the euro lost ground following yesterday’s release of the Eurozone’s November Producer Price Index (PPI), which came in at 27.1% year-over-year—below the market forecast of 27.6%. While the USD/JPY rose, the EUR/JPY traded in a range between 139.975 and 141.362, and the market direction remains unclear during today’s Asian session.EUR/JPY is trading just below the 4-hour 75-day moving average (MA), which could act as resistance, so traders should be cautious of further downside potential.

Today’s schedule includes German manufacturing orders and UK Halifax house prices at 4:00 PM, Swiss retail sales at 4:30 PM, the Eurozone Consumer Price Index at 7:00 PM, and Canadian and U.S. employment reports at 10:30 PM,at 12:00 AM: Canada’s Ivey PMI and the U.S. ISM Non-Manufacturing PMI; at 1:15 AM: remarks by U.S. Federal Reserve Governor Cook and U.S. Atlanta Fed President Bostic; at 2:15 AM: remarks by U.S. Richmond Fed President Barkin; and at 3:00 AM: remarks by U.S. Kansas City Fed President George.We should be on alert for a sharp rise in volatility due to the release of these indicators during U.S. trading hours.