– EURUSD touched 1.34
– India’s WPI inflation weaker than expected, supportive of rate cuts
– US data this week to show improve growth momentum
What to watch for today
USD: Bernanke. Fed Chairman Bernanke speaks on “monetary policy, recovery from the global financial crisis, and long-term challenges” at the University of Michigan at 21 GMT. Markets interpreted the minutes to the Fed’s December meeting as suggesting there was a good likelihood that Fed asset purchases could stop before the end of 2013, boosting rates across the curve even as the Fed began its round of outright purchases. Today’s speech provides Bernanke with an opportunity to set the record straight and re-emphasize the need for ongoing monetary policy support for the recovery for the foreseeable future. Failure to lean against the price action of the first weeks of the year would likely encourage renewed upside pressure on yields, boosting USDJPY and potentially undercutting last week’s rally in EURUSD.
Click here to read the full report: FX Daily
Credit Suisse