US Dollar advances as the 10-year yield hits multi-week highs
NEW YORK (January 17) The US Dollar (USD) reached a notable stride, trading at 103.50 while confidently deflecting the pressures of the 100-day SMA. This robust stride has been primarily fueled by the strong US Retail Sales data from December and a notable rise in US Treasury yields, both of which show that markets are adjusting their bets on the Federal Reserve’s (Fed) rate-cutting timeline.
The resilient US economy, evidenced by the latest data, is making adjustments to the market's dovish bets, albeit odds for rate cuts in March and May still hover around 50%. In December, CPI inflation picked up, as well as the job creation pace and wages, while economic activity remains strong, which is making markets believe that the Fed might not consider cutting rates too soon.
Daily Digest Market Movers: US Dollar ascends, bolstered by strong Retail Sales from December
- December's Retail Sales reported by the US Census Bureau outperformed consensus, registering 0.6% growth versus the 0.4% forecast and 0.3% from the previous period.
- The Fed's Beige book report didn't trigger any movements on the Greenback. It stated that the majority of the twelve Federal Reserve districts reported little or no change in economic since the last release.
- An uptick was observed in US bond yields as 2-year, 5-year, and 10-year notes currently trade at 4.30%, 4.02%, and 4.09% (its highest since mid December), respectively.
- As per the CME FedWatch Tool, the odds of cuts for March and May eased, but they remain high at around 50%.
FXStreet
