| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 10:00 | Eurozone | Industrial production, (MoM) | November | -1.3% | 0.5% | 2.3% |
| 10:00 | Eurozone | Industrial Production (YoY) | November | 0.2% | 0.6% | -1.5% |
USD traded mixed and little changed against other major currencies in the European session on Wednesday, as investors awaited the release of the key U.S. inflation report for December later in the day, which is widely anticipated to guarantee a March interest rate liftoff by the Federal Reserve.
The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, edged up 0.01% to 95.63.
The U.S. inflation report for December will be published at 13:30 GMT. Economists suggest that the data will reveal a 7.0 percent y/y jump in headline CPI and a 5.4 percent y/y climb in core CPI. If realized, both inflation rates would be higher than their November readings, which hit levels unseen in decades. The hot CPI readings are expected to spur the Fed policymakers into action.
While testifying before the Senate Banking Committee on Tuesday, the Fed’s Chair Jerome Powell stated that the U.S. central bank will use all its tools “to prevent higher inflation from becoming entrenched”. He also said that he thinks the Fed’s asset purchases will end in March, interest rate hikes will be made over the course of 2022, and the reduction of the balance sheet will start later in the year. Powell, however, noted that the Fed’s policymakers had not decided on a timeline for any of the normalization processes yet.
According to the CME FedWatch Tool, market participants are now seeing a 78.7% chance that the Fed will increase its interest rates at its March meeting.