On Thursday, the US dollar experienced a new shock only against the backdrop of weak industrial inflation data, which showed growth of a previously noticeable slowdown in December last year.

According to the data of economic statistics, the annualized basic producer price index (PPI) in the United States reduced its growth to 2.3% against the previous value of 2.4% and the expected increase of 2.5%. The monthly value of the index also decreased in December by 0.1% against the November growth of 0.3% and expectations of an increase of 0.2%.

On the same day, the general values of US manufacturing inflation were published, which turned out to be weak and put pressure on the US dollar. The producer price index (PPI) in annual terms fell to 2.6%, versus the projected increase of 3.0% and compared with the value of 3.1% in the previous period. The December figures generally fell to a negative value of -0.1% against the November growth of 0.4% and expectations for an increase of 0.2%.

In line with this news, the US dollar was under pressure across the entire range of the foreign exchange market, waking up another fear that the braking of inflationary pressures could eventually lead to the Fed "settling down" and delay the interest rate hike.

Today, the focus of the market will be on the publication of the US consumer inflation data, as well as on the retail sales values. It is assumed that the overall consumer price index (CPI) in annual terms will drop to 2.1% from 2.2%. On a monthly basis, it is expected to increase by 0.2% in December against the 0.4% growth in November. According to forecast, the basic consumer price index should remain at the 1.7% level in annualized terms, and its monthly December value should gain 0.2% against 0.1% growth in November.

The figures of retail sales should demonstrate growth over the past month by 0.4% against a notable increase of 0.8% in November.

Forecast of the day:

The EUR/USD pair approached again the local highs on the wave of expectation for a faster change in the ECB monetary rate this year along with the negative data on manufacturing inflation in the United States. If the news from the US today came in gloomy, then the pair may continue to rise to 1.2120, but if they do not fail, there is a probability of its local decline to 1.1915.

The USD/JPY pair may also fall on negative news from the US to 110.50 after the breakthrough of the support level of 111.00. But it also grows to 112.00 if the data is positive.

* The presented market analysis is informative and does not constitute a guide to the transaction.