FOREX TODAY: FOCUSING ON THE FINAL 2023 FED POLICY ANNOUNCEMENTS

What you need know on Wednesday, December 13 is as follows:

Major currencies were unable to find direction on Tuesday as a result of the US inflation report for November, and traders refrained from taking significant positions ahead of the Federal Reserve's (Fed) final policy pronouncements of the year. Along with the policy statement, the Fed will release the updated Summary of Economic Projections (SEP), popularly known as the dot plot, and include the Producer Price Index (PPI) data in the US economic docket. Lastly, a press conference will be held by Fed Chairman Jerome Powell to address questions and discuss the policy outlook.

As anticipated, the US Consumer Price Index (CPI) increased 3.1% annually in November. During the same time period, Core CPI inflation, which does not include volatile food and energy costs, remained stable at 4%, in line with market expectations. Following a period of extreme volatility in response to CPI data, the US Dollar Index (USD) leveled off at 104.00. Wall Street's primary indexes closed higher as the benchmark yield on US Treasury bonds declined to the 4.2% region. Early on Wednesday, the USD Index trades sideways close to 104.00 while the 10-year yield remains volatile at 4.2%. It is generally anticipated that the Fed will maintain the policy rate at 5.25–5.5%.

The dot plot will be closely watched by investors as they attempt to predict when the policy will change in 2019.

US dollar exchange rate for this week

The US dollar's (USD) percentage movement compared to a list of major currencies for this week is displayed in the table below. The US dollar outperformed the Japanese yen in this exchange.

The major currencies' percentage movements relative to one another are displayed on the heat map. The quotation currency is selected from the top row, and the base currency is selected from the left column. For example, the percentage change shown in the box will indicate EUR (base)/JPY (quote) if you select the Euro from the left column and proceed along the horizontal line to the Japanese Yen.

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The Australian Bureau of Statistics will release employment data for November and the University of Melbourne will publish Consumer Inflation Expectations for December during Thursday's early Asian session. Tuesday's advance on AUD/USD above 0.6600 was quickly erased, and the pair ended the day flat. The pair opens Wednesday's trading session at roughly 0.6550, slightly down on the day.

In response to US inflation statistics released on Tuesday, the EUR/USD strengthened to a weekly high over 1.0820, but it was unable to maintain its positive momentum. The pair appears to have entered a consolidation phase somewhat below 1.0800 in the European morning. On Wednesday, October's industrial production figures will be made available by Eurostat.

After a calm Asian day, there was more bearish pressure on GBP/USD, which was last seen trading below 1.2550. The Gross Domestic Product (GDP) in the UK fell by 0.3% on a monthly basis in October, according to a study released by the Office for National Statistics on Wednesday. During the same time period, manufacturing and industrial production fell by 1.1% and 0.8%, respectively.

The Japan-sourced statistics released early on Friday indicated that the Tankan Large Manufacturing Index increased from 9 to 12 in the fourth quarter. On a negative note. The Tankan Large Manufacturing Outlook dropped from 10 to 8. The USD/JPY strengthened during Asian trading hours, closing in on 146.00 by the European morning.

Although there were not many changes, gold did not draw any purchasers on Wednesday morning. XAU/USD was trading below $1,980 at its lowest point in three weeks as of this writing.