Forex Today – Asian Session: Dollar Tumbles on Fed Rate Raise 25 Basis Points From Now

This is what you need to know to trade today friday january 13:

Financial markets spent the first half of the day extending their previous consolidation phase, finally exploding with the release of the US Consumer Price Index (CPI).. The US CPI rose in December at an annual rate of 6.5%as expected, while core price pressures increased by 5.7%, in line with market forecasts. On a monthly basis, inflation contracted by 0.1%, while the core reading met expectations, rising 0.3%.

Signs of easing price pressures in the world’s largest economy were joined by comments from US Federal Reserve officials.

The first of these was that of the president of the Federal Reserve Bank of Philadelphia, Patrick Harkerwho stated that “the worst of the inflation spike is probably over“, adding that the time for large-scale rate hikes is over, and that time to move to 25 basis point increments (bp). The dollar sank on his comments as Wall Street soared, although volatility dominated the American session.

Next, the head of the Federal Reserve of San Luis intervened, James Bullardwho pointed out that inflation will most likely remain above 2%, so the policy rate will have to be higher for longer. Finally, the president of the Richmond Federal Reserve, Thomas BarkinI affirm that it “makes sense” to conduct more deliberate monetary policy while the Fed works to reduce inflation.

The markets ignored other positive news, but it was there to support optimism. During Asian trading hours, the Bank of Japan (BoJ) announced that it would investigate the consequences of its ultra-expansionary policy. The markets interpreted it as a possible change in the monetary policy of the central banks. Also, China resumed imports of Australian coal, after banning them in the early stages of the COVID-19 pandemic. Later in the day, market talk suggested that the UK and the euro zone will start talks to end the Brexit standoff and come to a final agreement.

The pair EUR/USD trades around 1.0840, while the GBP/USD stands at 1.2210, not far from multi-month highs. Commodity-linked currencies also rallied, with the AUD/USD now trading at 0.6970 and the pair USD/CAD falling to 1.3350. Lastly, the pair USD/JPY round 129.30, after bottoming out at a new multi-month low of 128.86.

The price of Prayed flirted with the $1,900 level and ended the day around $1,896 a troy ounce. Crude oil prices also rose, with the WTI at $78.70 a barrel.