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Tuesday brings a focus on the US Consumer Price Index data for January, with expectations of a softening to 2.9% annual inflation, down from 3.4% in December. ZEW Survey results from Germany and OPEC’s Monthly Market Report are also expected to provide fresh impetus in the European trading hours.
The US Dollar (USD) Index continues to fluctuate just above 104.00 early Tuesday, with US stock index futures trading marginally lower. The benchmark 10-year US Treasury bond yield remains near 4.2%. Analysts are forecasting core inflation to edge down to 3.8% and headline inflation to 3.0%.
In the UK, the Unemployment Rate declined to 3.8% in the three months to December, below the market’s expectation of 4%. Meanwhile, GBP/USD gained traction and climbed to the 1.2650 area in the early European session.
Switzerland saw its annual CPI rise 1.3% in January, down from the market expectation and December’s increase of 1.7%, leading to a rise in USD/CHF.
Moving to the currency price today, the US Dollar was the strongest against the Swiss Franc, while EUR/USD continued to move in a tight range below 1.0800.
USD/JPY registered small gains and reached its highest level since late November, trading above 149.50. Gold corrected from three consecutive days of negative trading, currently trading modestly higher above $2,020.
Stay tuned for more updates as the day unfolds.