Japanese Yen extends losses as Takaichi’s opposition to rate hikes weighs on the currencyRenewed uncertainty around tariffs weighs on the Indian Rupee amid Trump threatsEurozone January final CPI +1.7% vs +1.7% y/y prelimThe Australian dollar weakens as RBA’s Bullock signals patience on judging policyGold’s momentum wanes as focus turns to US-Iran talks and NFP report next weekEx-BoJ Governor Kuroda urges tighter policy; warns Takaichi stimulus could fuel inflationGermany Q4 final GDP 0.3% vs 0.3% q/q prelimFX option expiries for 25 February 10am New York cutWhat are the main events for today?
The most notable mover in the session was the Japanese yen as the currency extended the decline that started yesterday following the report revealing Takaichi’s opposition to further rate hikes. Ironically, the former BoJ chief, Haruhiko Kuroda, who started the massive monetary easing in 2013, called for tighter monetary and fiscal policy since the current economic context is different from what Japan experienced in the past decades.
The Australian dollar pared some of the overnight gains after RBA’s Bullock called for patience on policy. Traders reduced slightly the March rate hike odds from 24% to 15% following Bullock’s comments.
We also got the final German Q4 GDP and January’s Eurozone CPI. Both the reports matched the preliminary estimates, so the market reaction was muted. At the moment, traders do not expect any rate adjustment from the ECB this year.
In the American session, we don’t anything on the agenda other than a few Fed speakers. They are very unlikely to deviate from their recent stance though, so don’t expect much. Next week’s NFP report might trigger a major pivot if we see a repeat of the strong January’s data.
This article was written by Giuseppe Dellamotta at investinglive.com.