Daily FX Update

Into the NA open markets are digesting the PBoC rate cut, China’s better than expected PMI, weak capital spending data from Japan, disappointing inflation data from Australia and some signs of stabilization in the Eurozone pricing trend. Together the releases continue to suggest that both growth and inflationary pressures are low and most central banks are administering notably loose policy. Today, it is the U.S. release of CPI that is key. Expectations are that headline will be weighed down to 0.2%y/y on falling energy, but that core will stabilize at 1.3%y/y. From the Fed’s perspective, it is this stabilization that is key.

Read the full report: FX Daily