ECB’s Kažimír: We need to deliver two more 50 bps rate hikes 0 (0)

<ul><li>Inflation easing is good news but not reason enough to slow pace of rate hikes</li><li>Core inflation trend is most important for me</li><li>Not certain how high rates should go or how long they should stay there</li></ul><p style=““ class=“text-align-justify“>Technically, his argument is valid if you go by the latest inflation report <a target=“_blank“ href=“https://www.forexlive.com/news/eurozone-december-final-cpi-92-vs-92-yy-prelim-20230118/“ target=“_blank“ rel=“follow“>here</a>. Meanwhile, ECB policymaker Stournaras is out saying that „rate hikes should be more gradual“. That possibly indicates a slight divide behind the scenes between the governing council on their next policy steps but we’ll see.</p>

This article was written by Justin Low at www.forexlive.com.

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Bundesbank says German economy likely stagnated in Q4 0 (0)

<ul><li>Recent indicators have been better than expected</li><li>Q4 GDP likely to have roughly stagnated, exceeding earlier expectations</li><li>Stress on energy markets is easing and supply chain bottlenecks are slowly dissipating</li></ul><p style=““ class=“text-align-justify“>That’s a positive nod but we’ll see how the first look into the numbers play out when they are released on 31 January. A positive surprise, which some economists are even predicting, will be an optimistic boost for the euro.</p>

This article was written by Justin Low at www.forexlive.com.

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Dollar holds slightly lower in quiet trading so far 0 (0)

<p style=““ class=“text-align-justify“>Not a whole lot is taking in place in European morning trade so far. Equities are cautiously optimistic with US futures little changed and European indices marginally higher, while 10-year Treasury yields are off earlier lows around 3.47% to be up 1.7 bps to 3.50% at the moment. The dollar is slightly lower as there are still a few key themes that markets are working with:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/same-old-brand-new-story-for-us-stocks-to-start-the-week-20230123/“ target=“_blank“ rel=“follow“>Same old brand new story for US stocks to start the week</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/dollar-on-the-brink-20230123/“ target=“_blank“ rel=“follow“>Dollar on the brink?</a></li></ul><p style=““ class=“text-align-justify“>EUR/USD is sticking close to 1.0900, up 0.4% on the day, while USD/JPY is also up 0.4% and holding just above 130.00 as noted earlier <a target=“_blank“ href=“https://www.forexlive.com/news/usdjpy-creeps-back-up-above-13000-as-the-volatility-trip-continues-20230123/“ target=“_blank“ rel=“follow“>here</a>. The pound is moving lower though as cable buyers are finding the rejection of the December highs at 1.2443-46 tough, falling to 1.2365 at the moment.</p><p style=““ class=“text-align-justify“>Meanwhile, the aussie is hopeful for a technical push above 0.7000 against the dollar as price is up 0.7% to 0.7013 currently.</p><p style=““ class=“text-align-justify“>There aren’t any major headlines to drive the market moves, so it is pretty much just flows acting up so far on the session. But as warned earlier, just be mindful of the two potential key themes above that could come into play as we look towards US trading later.</p>

This article was written by Justin Low at www.forexlive.com.

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UBS revises higher its forecast for GBP/USD in 1H 2023 0 (0)

<ul><li>1.19 by the end of March (previously 1.16)</li><li>1.23 by the end of June (previously 1.21)</li><li>1.24 by the end of September (unchanged)</li><li>1.30 by the end of December (unchanged)</li></ul><p style=““ class=“text-align-justify“>For some context, the pair is now trading at roughly 1.2400 and with the dollar in a precarious spot, it might be poised for a further upside break as outlined <a target=“_blank“ href=“https://www.forexlive.com/news/dollar-on-the-brink-20230123/“ target=“_blank“ rel=“follow“>here</a>. Or so at least that is what the technicals are suggesting.</p>

This article was written by Justin Low at www.forexlive.com.

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Yellen: Overall good feeling that inflation is coming down 0 (0)

<ul><li>US labour market is still very tight</li></ul><p style=““ class=“text-align-justify“>She mentions that there is encouragement from recent data that the rate of US inflation has declined. Well, the trend in the past few months is a welcome development but it remains to be seen if this is enough to stay the course for inflation to return towards 2% or if we will eventually hit a spot where inflation is seen as being more sticky – one that is well above the 2% mark.</p>

This article was written by Justin Low at www.forexlive.com.

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