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Dollar on the rebound ahead of key PCE report-check out the USD/JPY now

Since earlier updates here the USD/JPY has extended the rebound from a low at 149.61.That rebound has seen it push back above 150 in more recent trading (150.11 high). The EUR/USD has dropped back from an earlier session high at 1.0854. It is now tracking back towards its earlier session low at 1.0826. Of course this overall dollar rebound might change when that PCE data drops across the screens, so here is a brief outline of what is expected. The forecast is for personal income to have risen by 0.4% in January, from a 0.3% rise in December. However, spending is expected to have dropped back (the January retail sales data would certainly endorse that), to +0.2%, from +0.7%. The key element of all this is the deflator and that is anticipated to have gained by 0.3% on the month, from 0.2%.. The annualised rate is forecast to fall to 2.4%, from 2.6%. The core annualised rate is forecast to edge lower, to 2.8% from 2.9%. So, quite simply, anything above 3% and the dollar should fly. Below say 2.7% and it could fall back again, perhaps harder into the monthly close. The USD/JPY will be front and centre of any reaction and an update will follow here once the data is released. It is just now trading at 150.02
 

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