Despite the Fed’s and banks’ tough stance on inflation, the US dollar is preparing for 2023. The upcoming Christmas week could turn off the spotlight since less liquidity would result from traders. Since many traders will be taking time off to celebrate economic data, we will do the major work. Economic data to be released this week could be a major deal for the US dollar’s navigation in 2023. Only a few economic data points for 2022 have yet to be released. As a result, all eyes are on the upcoming central bank meeting.
US Dollar Economic Update
One of the upcoming reports to look out for is the US PCE data. Traders and investors are looking forward to the release of November PCE on Friday. With the Fed containing inflation, the market expects an increase of up to 0.2% with a yearly rate increase of 4.7%. Nevertheless, the PCE exceeding its expectations means that the Fed is more likely to set rates for a while.
The US market seeks out loose growth in the economy even without being pressured by Fed rate hikes. All eyes are on the Consumer Confidence Index report by the Conference Board. The Feds’ discussion will be confirmed in a report on Wednesday. A positive result will imply that US consumer confidence is more likely to decline.
The US dollar has remained sensitive since the beginning of this week. Based on a statistical view, the US economic data may not be supportive of US bond yields. The ECB and the Fed have been playing their respective roles. The ECB is aiming for a stronger euro, while the Fed continues to tighten the process. However, with the variety of economic data to be updated this week, from consumer confidence data to PCE personal income, this may not be enough to give much strength to the US bond yield, with the 10-year Treasury still holding at 3.5%.
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