Dollar pulled in different directions, multi-month moves

The U.S. Dollar is trading in mixed ranges across the board after experiencing its first drop of the year yesterday with inflation coming in as expected. Consumer Price Index figures from December showed the monthly advance at the pace of 0.3% as expected, but the Core CPI for the year went down slightly from 2.7% to 2.6%. According to an optimism survey by the National Federation of Independent Business, Small Businesses are feeling a little bit more positive about the future. Laer at 10M, we will get October New Homes Sales numbers. At the time of wiring, the Buck managed to find steadiness and the data caused no impact.

There is potential for getting word from the Supreme Court when it comes to their tariffs ruling and speculation over it is overshadowing concern over Federal Reserve independence being at risk with the launch of an investigation. Several members of Congress have spoken against the move emanating from the Department of Justice. Meanwhile, oil prices surged to their highest in two months as tensions with Iran have increased and tankers are being intercepted in the Black Sea. Tomorrow will feature Retail Sales as well as Producers Price Index figures from November. There could be turbulence on the way.

What to Watch This Week…

• US PPI, Wednesday
• Monex USA Online is always open

The complete Economic Calendar can be found here.

MXN ⇑

The Mexican Peso is trading near its strongest level against the Buck since July of 2024 being one of the biggest beneficiaries from investors questioning over the Fed’s situation.

As the news was digested by markets, the Buck lost ground across Emerging-Market assets. Markets seem to be jumping once again on what had been donned the “Sell America” trade while Peso and others continue to have carry-trade appeal. Without much in terms of data, energy prices increasing may also bode well for the Peso if the  trend continues for the week.

JPY ⇓

The Japanese Yen is trading around its weakest point since July 2024 as Japan may have snap elections.

A report stated that Prime Minister Sanae Takaichi has all intentions to call for a snap election in order to have a stronger mandate as she looks to expand expenditures and improve defense capabilities to have more influence in the region to counter Chinese goals. It is possible financial authorities will give the go-ahead to FX intervention if the currency declines in value by another 1.0%. Japanese Finance Minister Satsuki Katayama expressed concern over the one-way depreciation in a meeting with U.S. Treasury Secretary Scott Bessent.