The dollar is trading with a bid tone again this Wednesday after some mild profit-taking on dollar longs earlier.
It appears the “Trump trade” hasn’t been fully flushed out, and there could still be a little more room for dollar upside as we get updates from the incoming administration regarding appointments and policies.
Meanwhile, the euro hasn’t received any support from German producer prices, which came in as expected.
The same cannot be said for the pound, which has been a relative outperformer despite mild setbacks against the dollar. This comes after UK inflation data came in hotter than expected, forcing UK rates traders to adjust policy expectations.
Earlier today, Chinese banks held their benchmark 1-year and 5-year lending rates at 3.1% and 3.6%, respectively.
Looking ahead, the absence of first-tier economic data on the docket in North America will leave the focus on central bank commentary from various Fed, ECB, and BOE officials.
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