U.S. Inflation Ease While Dollar Falls

U.S. Dollar Index (USDX)

The dollar wobbled during the early trades as cooling U.S. inflation raised hopes of the Federal Reserve slowing the pace of interest rate hikes. The dollar index gained 0.117% at 102.280, having slipped to its lowest level since June earlier in the session.

Meanwhile, Federal Reserve members expressed their ease on lessening inflation after U.S. CPI surprisingly fell for the first time in more than 30 months in December.

The dollar index trades under heavy selling pressure and remains committed to the downtrend that started in early November. Meanwhile, the hourly chart shows robust selling pressure despite the overselling readings from RSI and MACD.

Pivot Point: 102.85

Japanese Yen (USDJPY)

The Japanese yen rose 0.1% against the dollar to an over seven-month high of 128.30 and was among the best-performing currencies this week as rising inflation in the country drove up bets that the Bank of Japan will eventually tighten its ultra-loose policy this year.

Data showing a massive current account surplus in November also indicated that some facets of the Japanese economy remained strong despite broader headwinds.

Pivot Point: 128.30

Spot Gold (XAUUSD)

Gold prices rose slightly on Friday and were set for a fourth straight week of gains after U.S. consumer inflation data showed that price pressures eased as expected in December, setting the scene for a slowing pace of interest rate hikes by the Federal Reserve.

Prices of the yellow metal surged to a more than eight-month high this week as traders positioned for easing pressure from the dollar and Treasury yields in the coming months. Spot gold rose 0.1% to $1,898.86 an ounce, while gold futures rose 0.2% to $1,902.10 an ounce.

Growing expectations of this shift have spurred a sharp rally in gold since late December, given that it heralds some relief for the yellow metal after it was battered by a sharp rise in interest rates throughout 2022.

Spot gold remains solid and hits the strong resistance at 1,900 while keeping the buying pressure at the highest levels in a few months. If gold prices close above 1,880 it is likely to see 1,900 and 1,910. However, if gold failed to break the resistance it will most likely drop between 1,860 and 1,850.

Pivot Point: 1,900

WTI Futures (CL-OIL)

Oil prices slipped in early trade on Friday but were on track for gains of more than 6% for the week on solid signs of demand growth in top crude-oil importer China and expectations of less aggressive interest rate rises in the United States.

Brent crude futures had fallen 0.4% to $83.70 a barrel, while WTI futures slipped 0.3% to $78.19. Brent has jumped 6.7% this week, while WTI was up 6.2%, recouping most of last week’s losses.

Oil prices have been buoyed by a slide in the dollar to a nearly nine-month low, reinforcing expectations the Federal Reserve would slow the pace of rate hikes. A weaker greenback tends to boost demand for oil as it makes the commodity cheaper for buyers holding other currencies.

Pivot Point: 78.50