Dollar Index Locked on February 14th
Attention on Us January CPI Data!
The announcement of the US January non-farm employment figures, which came in well above expectations, has triggered a significant movement in DXY(dollar index). An additional increase of 517k in employment, compared to the expected 185k, coupled with a decrease in the unemployment rate and lower-than-expected growth in hourly wages, has raised concerns about inflationary pressure, bringing it back onto the market's radar.
Dollar Index on the rise
DXY has climbed from 100.80 to 103.50 during this period. In the early hours of February 8, trading is hovering around 103.50. The continuation of employment and wages growing higher than expectations supports the forecast that consumption and inflation will remain lively in the US.
When will the us january (CPI) be announced?
Eyes are on the US CPI for January, which will be announced on February 14th, for DXY. The US inflation rate, which stands at 6.5%, is expected to decrease to 6.2%.
How will the dollar index react?
If the January inflation in the US comes in line with expectations or lower, there could be a pullback towards the 100.00 limit for DXY. The weighty expectations for DXY today are in this direction. However, in case of a weaker decline or increase in inflation, DXY could gain momentum with an upward volatility.
Critical levels in the dollar index: pay attention to the 50-day average!
DXY which is continuing its movement in a downward trend, broke the 50-day average level "downward" at the beginning of November. In the last 3 trading days, DXY is challenging the 50-day moving average level (103.60) located at 103.60. In this sense, both the 50-day MA (103.60) and the resistance of the downward trend (103.80) in DXY should be closely monitored.
Fed's decisions:
The FED, as expected, raised interest rates by 0.25 points to 4.75 at the February meeting. After that, it gave a signal of "continuing interest rate increases". However, the market expects one 0.25 hike in March and May meetings and predicts that the FED will wait at maximum 5.25 under current conditions.
