In this week's episode, we delve into key economic data releases and major central bank meetings that lie ahead. Recently, the USD has demonstrated notable strength, rallying across all G10 currencies. The driving force behind this surge? Markets adjusting expectations as the likelihood of a Fed rate cut in March dips below 50%, marking the first time since the December FOMC meeting. The Federal Reserve's hawkish stance and robust US economic data, including encouraging December retail sales and a formidable fourth-quarter GDP report, play a pivotal role in shaping market dynamics. Surprisingly, despite hawkish communications from the Bank of Japan, the JPY lags behind, while the EUR and GBP manage to hold up relatively well, with the latter performing particularly well this year.
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