Jan 15, 2024: In early European trade on Monday, the U.S. dollar exhibited muted movements, with limited activity due to the Martin Luther King Jr. Day holiday. The Dollar Index, tracking the greenback against a basket of currencies, traded 0.1% higher at 102.242.
Following the unexpected decline in U.S. producer prices in December, traders are increasingly speculating about early interest rate cuts by the Federal Reserve. Market pricing indicates a 78% chance of the central bank initiating rate cuts in March, up from 68% a week ago, according to the CME FedWatch tool.
The U.S. data calendar for the week is relatively quiet, with retail sales on Wednesday taking center stage. Investors eagerly await this data to gauge the resilience of consumer spending, a crucial driver of economic growth, in the face of elevated interest rates. Projections suggest a 0.4% increase in retail sales for December, following a 0.3% rise in November.
Additionally, investors will have the opportunity to hear insights from several Fed officials, including Fed Governor Christopher Waller, Atlanta Fed President Raphael Bostic, and San Francisco Fed head Mary Daly.
