It remains to be seen whether the momentum behind the euro’s sharp recovery against the dollar will continue.

It remains to be seen whether the momentum of the euro’s sharp recovery against the dollar will continue.

18.01.2024

In the U.S. currency market yesterday, the dollar rose against the yen after the release of U.S. December retail sales data showed an improvement from 0.3% in the previous month to 0.6%, with the core index also rising from 0.2% to 0.4%.The USD/JPY pair rose from 147.040, breaking through the key 148-yen level to reach 148.523. It climbed to a level matching last month’s high. However, given that the weekly chart shows three consecutive weeks of sharp yen weakness, investors should watch for corrective price movements.

The euro traded in a tight range against the U.S. dollar after the final figures for the Eurozone’s December consumer price index, released yesterday, showed no change from the previous month’s 2.9% and a core year-on-year rate that also remained at 3.4%. The EUR/USD pair fell to 1.0846 before rebounding sharply.The rebound continued during today’s Asian session, pushing the pair up to 1.0903. Notably, the EUR/USD pair rebounded after touching the 75-day moving average on the daily chart. We will be watching closely to see if the euro recovers ahead of next week’s ECB meeting.

Today’s schedule includes Australian employment figures at 9:30, New Zealand’s non-resident government bond holdings at 11:00, Japan’s industrial production at 13:30, Hong Kong’s employment figures at 17:30, the Eurozone’s current account balance at 18:00,EU Construction Output, and South African Mining Production at 11:00; remarks by SNB Governor Jordan at 19:30; Brazil’s IBC-BR Economic Activity Index at 21:00; remarks by Atlanta Fed President Bostic at 21:30;Remarks by Bostick, President of the Atlanta Fed; at 10:30 PM, U.S. Housing Starts, U.S. Initial Jobless Claims, and the U.S. Philadelphia Fed Business Outlook Index; at 1:00 AM, U.S. Weekly Crude Oil Inventories; and at 3:00 AM, the U.S. 10-Year Treasury Auction. I intend to watch closely to see if the momentum of the sharp recovery in the euro-dollar exchange rate will continue.