FX DAILY REPORT – 15 January 2025
- The Rand opened stronger against all the majors this morning.
- The USD weakened yesterday afternoon following the release of Producer Price Index (PPI) data. The monthly PPI growth came in at 0.2%, below the expected 0.4%. As PPI often serves as an early indicator for Consumer Price Index (CPI) inflation, this points to the possibility of easing inflation. This could prompt the Federal Reserve to reevaluate its monetary policy, potentially leaning toward additional rate cuts.
- Donald Trump’s team is reportedly rethinking plans for steep tariff hikes on imported goods. Instead, they are considering a more gradual approach to adjusting trade policies, aiming to minimize the risk of triggering a sharp rise in inflation.
- The GBP has been under pressure, largely due to a poorly performing bond market driven by concerns over the UK’s economic outlook. Today’s release of the UK CPI inflation data, followed by tomorrow’s GDP results, could offer valuable insights into the future trajectory of the UK economy.
Todays Events:
- UK CPI Inflation (YoY) at 9:00 – Expected to remain the same at 2.6%. A higher-than-expected result can be seen as positive for the GBP.
- US CPI Inflation (YoY) at 15:30 – Expected to increase to 2.9% compared to the previous 2.7%. A higher-than-expected result can be seen as positive for the GBP.
- US Fed Member Williams Speech at 18:00