The increased likelihood of a Fed rate cut continues to weigh on the dollar, which weakened further as December's Retail Sales and Initial Jobless Claims signaled a disinflationary trend following a slower CPI. Core Retail Sales for December rose 0.4% month-over-month (previously 0.2%, consensus 0.5%), while Initial Jobless Claims increased by 14,000 to 217,000.
Fed Governor Waller highlighted that inflation is moving closer to the Fed's target, leaving the possibility of a rate cut in the March FOMC meeting on the table.
The US Dollar Index approached its 21-day EMA and the trendline but failed to recover previous losses, sustaining an uptrend within the ascending channel. However, there is a potential risk of breaking below the trendline. If the DXY breaks below the 21-day EMA and the trendline, it may fall further to the support level at 107.80. Conversely, if the index sustains its uptrend and tests the resistance at 110.15, it could gain upward momentum toward 110.80.
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Will the Increased Likelihood of a Fed Rate Cut Continue to Weaken the Dollar?
Published 01/17/2025, 10:30 AM
Will the Increased Likelihood of a Fed Rate Cut Continue to Weaken the Dollar?
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