Rates rise on US Wall, Street retreats... it's a rather favorable combination for the Dollar (better remuneration, a bit of risk-off on equities) but the $-Index has instead retreated, extending the consolidation movement begun the previous day below its zenith of 110.18.

It gave up 0.25% to 109.35, while the euro climbed +0.4% to 1.0280, the Swiss franc +0.35%, the Canadian dollar +0.1%, and it was the weakness of the yen (also -0.4% to $158, -0.8% against the euro) and the pound (-0.1% to 1.219) that kept the greenback afloat.

The Labor Department reports that US producer prices rose by 0.2% in December compared with the previous month, and by 0.1% excluding food, energy and business services (in line with the most optimistic forecasts).

Expressed as an annual variation, the rise in producer prices accelerated last month compared with November (+0.3 points to 3.3%) in unadjusted data, but slowed down (-0.2 points to 3.3%) excluding food, energy and commercial services (a score of +3.5% was expected).
But watch out now for the evolution of oil, with 'Brent' attacking the big resistance of $81 ('WTI' unsuccessfully testing $78 and falling back towards $77).

As we await Trump's inauguration on January 20, tomorrow traders will take note of US consumer price figures (which could give some indication of the Fed's interest rate trajectory), followed by December retail sales on Thursday.

If year-on-year household inflation exceeds the consensus of 3.3% and retail sales rise by more than the 0.6% expected by the market, expectations of a slowdown in Fed rate cuts will strengthen, which would support the dollar.

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