Important Information on US Inflation Expectations
Consumer inflation expectations for the next year are unchanged:
The Federal Reserve of New York’s most recent monthly poll shows that one-year consumer inflation forecasts in the US remained stable at 5.0%. The three-year-ahead gauge, meanwhile, experienced a modest decline, settling at 2.7% as opposed to 2.9% earlier.
Forecasts for headline inflation in January:
The headline inflation rate for January is expected to be 0.5% month over month and 6.2% year over year, according to experts. The inflation forecast for the next five years went from 2.4% to 2.5%.
Consumer Price Index Report is forthcoming:
The most recent consumer price index report will provide traders a more complete picture of the inflation trend, therefore they are anxiously expecting its arrival. On Tuesday morning, the report is expected to be made public.
Predictions for the Core Measure:
According to projections, the core measure of consumer prices will see a month-over-month change of 0.4%, which is in line with December’s figure. This would decrease the year-over-year print from 5.7% to 5.5%, a little improvement.
Effect on the US dollar:
If inflationary pressures are less than anticipated, the market may reprize a lower path for FOMC rises, which might lead to a decline in the value of the dollar.
DXY Index Technical Analysis:
Just below channel resistance at 103.80/104.00, the DXY index seems to be stabilizing. The index may go towards 104.65 and perhaps retest its high from January if positive factors drive prices higher. On the other hand, if prices are rejected from their current levels, a long-term ascending trendline at the 103.00-handle would act as the first support to look for.