The rise of the dollar is slightly held back at the start of European trading on Tuesday (January 14, 2025). Nonetheless, there is a possibility that the dollar will regain strength tonight due to the scheduled release of the Producer Price Index (PPI) data for the United States at 20:30 WIB.
Here are the figures from Trading Central:
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- PPI (Month-over-Month/December): forecast 0.3% vs previous 0.4%
- PPI (Year-over-Year/December): forecast 3.3% vs previous 3%
- Core PPI (Month-over-Month/December): forecast 0.2% vs previous 0.2%
- Core PPI (Year-over-Year/December): forecast 3.5% vs previous 3.4%
GOLD
Gold prices (XAUUSD) rose to $2,675.19 per troy ounce at the beginning of European trading. However, the increase in Gold prices appears to be limited as traders await the release of the US PPI data this evening.
Should the data come out higher than the forecast, Gold could face substantial downward pressure. This scenario may strengthen market expectations that the Federal Reserve will only reduce interest rates once this year, or even lead to speculation about a possible interest rate hike.
OIL
Oil prices (CLS10) saw a rebound to $79.06 per barrel in early European trading, recovering from a drop to $78.12 per barrel. Oil is nearing the five-month high achieved earlier in the week.
The positive sentiment around Oil persists following US sanctions on the Russian crude oil industry. Such measures may reduce global supply, resulting in a significant spike in Oil prices over the last two days. This sentiment is likely to continue influencing Oil movement in tonight’s trading.
EURUSD
The EURUSD pair increased during early European trading, hitting a daily high of 1.02775. Compared to Monday’s close, the pair gained 364 points (36.4 pips).
This upward movement can be viewed as a technical correction since the EURUSD was trading at its lowest levels since November 2022. If the US PPI data is released higher than the forecast, the EURUSD might experience renewed pressure.
GBPUSD
The GBPUSD pair briefly rose to 1.22500 before dropping back to 1.21805 in early European trading, indicating ongoing weakness.
The pressure on this currency pair could intensify should the US PPI data exceed the forecast.
USDJPY
USDJPY climbed to 158.026 at the beginning of European trading, recovering from a previous low of 157.069. The recent two-day decline in USDJPY can be attributed to a drop in Asian stock indices, which increased demand for the yen as a safe haven.
Today, the Asian stock indices are more stable, putting downward pressure on the yen and providing support for USDJPY. Positive sentiment for USDJPY may strengthen further if the US PPI data exceeds the forecast.
Nasdaq
The Nasdaq index rose during early European trading, reaching a daily high of 21,142. Yesterday, the index fell to a five-week low, prompting a buying response.
However, if the US PPI data released tonight comes out higher than the forecast, market participants may anticipate that the Federal Reserve might consider another interest rate hike, potentially creating negative sentiment for Nasdaq.
