| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 07:00 | United Kingdom | HICP, Y/Y | December | 2.6% | 2.6% | 2.5% |
| 07:00 | United Kingdom | HICP ex EFAT, Y/Y | December | 3.5% | 3.4% | 3.2% |
| 07:00 | United Kingdom | HICP, m/m | December | 0.1% | 0.4% | 0.3% |
| 07:45 | France | CPI, m/m | December | -0.1% | 0.2% | 0.2% |
| 07:45 | France | CPI, y/y | December | 1.3% | 1.3% | 1.3% |
During today's Asian trading, the US dollar fell slightly against major currencies, continuing yesterday's decline, which was due to partial profit-taking after the recent rally and investor position correction ahead of the release of important US inflation data.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.11% to 109.06. Yesterday, the index lost 0.62% amid weaker than expected December producer price data. Today, investors will focus on the consumer price index for December. A significant increase in energy and food prices at the end of 2024 supports the forecast for a 0.3% monthly increase in the consumer price index in December. In annual terms, CPI growth is likely to be 2.9%. Excluding food and energy, the core CPI is likely to show a relatively moderate monthly gain of 0.2%. Slower growth in vehicle prices and lower hotel prices should help contain core inflation. According to forecasts, on an annualized basis, the core CPI remained stable in December, at 3.3%. Although both general and core inflation have decreased compared to December 2023, the CPI has mostly shown sideways dynamics since the summer. Higher inflation figures will increase speculation that the Fed will abandon interest rate cuts in 2025, and perhaps even consider raising them, while weaker inflation data will support bets on further monetary policy easing this year. Traders are pricing in 29 basis points of easing this year, less than the 50 basis points the Fed projected in December. According to the CME FedWatch Tool, markets see a 2.7% probability of a 0.25% rate cut in January (compared to 5.3% a week ago), while the probability of an additional rate cut in March is 19.7%. However, analysts say that any impact of the inflation report on currencies is likely to be short-lived, as market attention remains focused on Donald Trump's impending return to the White House and his tariff plans.
The pound initially declined against the US dollar on the back of UK inflation data, but then moved into positive territory. The Office for National Statistics (ONS) said that consumer prices rose by 2.5% per year in December after an increase of 2.6% per year in November (the highest level since March). Economists had expected CPI growth of 2.6% per annum. However, it matched the BoE's forecast from early November. On a monthly basis, the consumer price index rose 0.3%, accelerating compared to November (+0.1%). Consensus estimates suggested an increase of 0.4%. Overall, recent data has increased the likelihood that the Bank of England may soon ease monetary policy.