Dance of the dollarBy Arnaud Masset
Three governors of the US Federal Reserve will speak publicly today, any of which might move the dollar. William Dudley and Eric Rosengren will talk about the Fed’s balance sheet, and John Williams will address the US’s economic outlook. Next week will also see some possible triggers: January new home sales will publish on Monday; January wholesale inventories and durable goods orders will print on Tuesday; Q4 personal consumption and GDP growth on Wednesday; and January personal income and spending on Thursday. The last is most important: it might signal inflation, which could force the Fed to accelerate tightening.
After a breather on Thursday, the USD extended gains Friday amid easing rate concerns. US treasury yields fell, the 10-year 3 basis points to 2.90%, while the 2-year was unchanged around 2.245%. Over the week, the buck has extended gains against all G10 currencies, making the biggest gains against the Swedish krona (+2.25%), the Norwegian krone (+1.30%) and high-quality, commodity currencies such as the Canadian, New Zealand and Australian dollar (+1.20%, +1.10% and +1%, respectively). EUR/USD has stabilised around 1.2110 as selling pressure lessens. The currency pair is right in the middle of its monthly range (1.2165-1.2555).
Asian markets higherBy Vincent-Frédéric Mivelaz
Asian markets were higher on Friday, led by the South Korean Kospi, surging to 2’451 (+1.54%), followed by the Hong Kong Hang Seng valued at 31’290 (+1.05%) and the Japanese Topix increasing to 1’760 (+0.82%). Japan’s January Core Consumer Price Index rose by 0.90% annually, in line with the previous month and confirming slow inflation.