Investors should watch the movement of the U.S. dollar, as the year-over-year core PPI in the U.S. fell by 0.2 percentage points.

Investors should watch the movement of the U.S. dollar, as the year-over-year core PPI in the U.S. fell by 0.2 percentage points.

15.01.2024

Last weekend, the U.S. dollar weakened against all currencies after the U.S. December Producer Price Index (PPI), released on the 12th, showed a year-over-year increase of 1.0%, up 0.1 percentage points from the previous month’s 0.9%, while the core year-over-year rate fell to 1.8% from 2.0% the previous month. The USD/JPY pair fell from 145.562 to 144.354.The decline halted upon touching the 200-period simple moving average (SMA) on the hourly chart. However, as the Dollar Index has recovered to 102.4, we should pay close attention to price movements during European trading hours.

European currencies fell against the yen after France’s December Consumer Price Index (CPI), released last Friday, remained unchanged from the previous month at 3.7% year-over-year.The EUR/JPY pair fell from 159.570 to 158.545. On the higher timeframe weekly chart, the EUR/JPY has retreated from the -2σ Bollinger Band to the 20-day moving average (MA) at the centerline. We will closely monitor whether the euro recovers against the yen at the start of the week.

Today’s economic indicators include Japan’s M2 money supply at 8:50, the UK’s Rightmove house prices at 9:00, Indonesia’s trade balance at 13:00, India’s wholesale price index at 15:30, Sweden’s consumer price index at 16:00, and at 19:00, the EU’sIndustrial Production and the EU Trade Balance at 19:00, the Israeli Unemployment Rate at 20:00, and Canadian Wholesale Sales and Canadian Manufacturing Sales at 22:30. We will closely monitor the movement of the US dollar following the 0.2-point year-over-year decline in the US Core PPI.