Euro Gains Ground Against Weaker Dollar as Focus Shifts to Upcoming CPI Report
Key Takeaways
- The dollar softens as the market waits for CPI dataÂ
- SEC hack sends Bitcoin soaring ahead of ETF decision
Euro’s Uptick
The EUR/USD pair is gaining some upward momentum, brushing against $1.095, primarily driven by a softer dollar. The popular pair has gained 0.3% in the last five days – just a spark, but it’s enough to showcase the dollar’s weakness as anticipation for the upcoming consumer price index (CPI) report comes to a head.Â
The dollar index (DXY), which tracks the greenback against a basket of six other currencies, was trading at 102.4 after having fallen 1.5% in the last month. It seems that the market is holding out on the buck ahead of upcoming key inflation data.Â
The CPI report, on deck for release on Thursday, serves as a key gauge of inflation, measuring the overall change in the price of goods and services over a given period. Headline CPI is expected to rise 0.3% month-on-month for December, while Core CPI (excluding food and energy costs) is estimated to increase 0.33% for the same timeframe.
Overall, analysts are forecasting a CPI reading of 3.2% annual growth – a far cry from the Federal Reserve’s 2% goal. The inflation data acts as a subtle guide for the Fed, influencing the central bank’s decisions on monetary policy. With this in mind, should inflation remain sticky, hopes for any interest rate cuts in the near future can be thrown out the window.
SEC Hack
In other news, crypto enthusiasts had the rug pulled from under their feet when a post from the Securities and Exchange Commission’s X account was revealed to be a hack. The unauthorized broadcast announced that much-anticipated spot Bitcoin ETFs had finally been approved by the federal agency before its deletion 20 minutes later. Investors were quick to react, pulling Bitcoin back down to $45,000k after it initially rose to $47,000k on the heels of the post.
In that context, the SEC is still expected to make a decision on the joint proposal submitted by Ark Investments and 21Shares later today.