Dollar remains strong
US interest rates will keep rising, and the dollar has reasons to continue its uptrend against major peers.
The Federal Reserve's fight against inflation is not over yet. The US producer price index rose by 0.7% in January, following a 0.2% decrease in December. That's above the 0.4% gain expected in a survey compiled by Bloomberg. Core PPI, excluding food and energy prices, rose by 0.5%, faster than the 0.3% gain expected and following a 0.3% increase in the previous month.
The Federal Open Market Committee is expected to continue raising interest rates through their May meeting, with a "meaningful" risk that they lift rates further in June, as well. The economists said that they were taking on board incoming information, including the January employment report and the Bureau of Labor Statistics revisions to the CPI data. "Even with our expectations for data weakening in Q2, the January employment report and revised inflation data point to upside risks to our rate outlook".
ECB will move its interest rate higher, but it will not be as high as the US's.
The Federal Open Market Committee is expected to continue raising interest rates through their May meeting, with a "meaningful" risk that they lift rates further in June, as well. The economists said that they were taking on board incoming information, including the January employment report and the Bureau of Labor Statistics revisions to the CPI data. "Even with our expectations for data weakening in Q2, the January employment report and revised inflation data point to upside risks to our rate outlook".
ECB will move its interest rate higher, but it will not be as high as the US's.
