By Jay and Julie Hawk of www.TheFXperts.com
The U.S. Dollar Index (DXY) traded down a fraction today as trade talks with China approach the trade truce deadline of March 1st. Also weighing on the DXY was U.S. CPI, which came out with a flat reading versus an expected increase of +0.1% m/m, while Core CPI increased to +0.2%, in line with expectations. The index currently lies at the 96.88 level, down just -0.06% on the day.
Elsewhere, the RBNZ left its Official Cash Rate unchanged at 1.75%, as was widely expected. The RBNZ reiterated that “consumer price inflation is expected to rise to around the mid-point of our target range at 2 percent.” The central bank added that, “the direction of our next OCR move could be up or down”, which analysts interpreted as meaning that interest rates might stay unchanged through 2020.
The Euro continued its slide this week, as Eurozone Industrial Production declined by -0.9% m/m versus an expected decline of only -0.4%. Also, Sterling also sold off after UK CPI hit a two year low by printing at +1.8% y/y, down from a previous +2.1% and versus a consensus of +2.0%
Still to come later this week, Thursday’s highlights will include the release of U.S. Core Retail Sales (+0.0%), Retail Sales (+0.1%), PPI (+0.1%) and Core PPI (+0.2%). Friday concludes the week with the release of UK Retail Sales (+0.2%).
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