• AU & US CPI are key headliners this week, so expect market volatility.
• The Aussie/US peaked at 0.6870 before losing strength, looking at consolidating.
• We could see major volatility during the CPI releases, potentially quiet until then!
• Welcome back to our first edition of the Weekly Currency Outlook for 2024!
• Kicking off this week, we have huge CPI releases for both AU & US markets which is surely to cause market volatility.
• AU CPI y/y is expected to drop to 4.5% from 4.9% which is meaningful, especially for talks around interest rate cuts this year. A reminder that the RBA’s target range is 2-3%.
• US CPI y/y expected to slightly rise to 3.2% from 3.1%, as the US is closer to achieving a rate cut compared to their global counterparts.
• Reminder that rate cuts generally provide weakness for the currency as money flows out of the country due to weaker returns on investment.
• We expect markets to significantly pick up next week as businesses are back in full force.
| Economic Calendar: Mon 8th January 2024 – Fri 12th January 2024 (High Impact) (AU/US) | |||||
| Day | Time (AEDT) | Event | Country | Forecast | Previous |
| Wed | 11:30am | CPI y/y | AU | 4.5% | 4.9% |
| Fri | 12:30am | CPI m/m | US | 0.2% | 0.1% |
| CPI y/y | US | 3.2% | 3.1% | ||
| Unemployment Claims | US | 211K | 202K | ||
| Sat | 12:30am | Core PPI m/m | US | 0.2% | 0.0% |
| PPI m/m | US | 0.1% | 0.0% | ||
Source: forexfactory.com