USD Little Changed Despite Weak US CPI, Dovish Powell

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Note The table above is updated before publication with the latest consensus forecasts. However, the text charts are prepared ahead of time. Therefore there can be discrepancies between the forecasts given in the table above and in the text charts.

Rates as of 0500 GMT

Market Recap

A day of such small changes, its barely worth discussing them. This looks like just Brownian motion in the FX market there will always be changes in rates due to order flow exporters repatriating money, importers buying things, portfolio managers purchases, etc. Same with the stock market, where the SP 500 was virtually unchanged 0.03 and NASDAQ not much more 0.25. In fact some 60 of the SP 500 stocks were higher, but some of the big names in the tech industry, such as Tesla 5.3 were lower as more cyclical industries such as energy and semiconductors came into fashion.

Perhaps its a dog that didnt bark day the most interesting thing was something that didnt happen. The dollar was little changed overall despite a weakerthanexpected core US consumer price index unchanged mom vs 0.2 mom expected, and with the previous months figure revised down. The yearonyear rate fell to 1.4, the slowest pace of increase since last June.

There was also a lot of dovish talk by Fed Chair Powell in his speech to the Economic Club of New York. He said the labor market is still very far from strong, its important for policy to be patiently accommodative, and he put the real unemployment rate in January…

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