Currency markets may go into standby mode today as the flow of US data slows and a wait-and-see approach prevails ahead of Monday’s presidential inauguration, says Francesco Pesole, currency analyst at ING.
The Fed enters the communication blackout period tomorrow
“The sentiment at the end of a busy week in macroeconomic news is that optimism around a month-on-month slowdown in core inflation is cautious at best. Markets, which are inherently forward-looking, are factoring in the “Trump’s inflationary policies from a starting point that is already significantly above the target. So, despite the extended positioning and short-term overvaluation, the dollar continues to elude true catalysts for a correction.”
“Yesterday’s Senate hearing for Treasury Secretary nominee Scott Bessent wasn’t particularly relevant to markets. He predictably emphasized the need to cut discretionary government spending, a signature Trump policy, but it didn’t sound as in line. tough as Trump on implementing new tax cuts. In Trump’s first administration, Cabinet members often had to tone down the President’s strong statements, and we can probably expect Bessent to make more balanced comments on tax policy, considering the imminent debt restrictions.”
“Today’s calendar includes housing starts and industrial production in the US, which are both expected on the strong side. The Federal Reserve enters the communication blackout period tomorrow before the January 29 meeting. We expect some stabilization in most dollar crosses today.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
