US Dollar Gains Likely To Be Limited


The U.S. dollar is higher but remains in a trading range as the bearish influence of disappointing U.S. economic data is offset by recent hawkish comments from Federal Reserve officials.

flat dollar bill

Annual producer inflation in Germany declined to 21.6% in December 2022 from 28.2% in November, which compares with market predictions of 20.8%, and marking the lowest level since November 2021.

Retail sales in the U.K. fell again in December, while consumer confidence declined to a new low. The Office for National Statistics said retail sales declined 1.0% from November, the fourth drop in five months, leaving them down 5.8% on the year.

The annual inflation rate in Japan increased to 4.0 % in December 2022, which is the highest since January 1991, adding to pressure on the Bank of Japan to unwind its monetary easing policy.


Stock index futures are mixed in an atmosphere of increasing concerns about a potential recession.

The 9:00 December existing home sales report is expected to show 3.970 million. There were 4.09 million existing home sales in November.

The technical aspects are supportive on balance.


Yesterday two Federal Reserve officials said the central bank was making progress in its inflation fight, but it would take time to bring inflation back to the Fed’s 2.0% target.

Federal Reserve Vice Chair Lael Brainard indicated she was supportive of slowing the pace of interest rate increases to a more traditional quarter percentage point at the central bank’s next policy meeting.

In addition, New York Fed President John Williams said he was encouraged by signs interest rate increases were having their desired effect in slowing growth and keeping consumers’ and businesses’ expectations of future inflation in check.

Federal Reserve speakers today are Patrick Harker at 8:00 and Christopher Waller at 12:00.

According to financial futures markets currently, there is a 94.0% probability that the Federal Open Market Committee will increase its fed funds rate by 25 basis points at the February 1  policy meeting and a 6.0% probability that the rate will be hiked by 50 basis points.

The long term outlook is for higher futures prices.


Interested in more futures markets?  Explore our Market Dashboards here.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now