USD: Data focus on PCE and GDP – TD Securities

💡 DMK Insight

Core PCE data is on the horizon, and here’s why it matters: a rise could signal tighter monetary policy ahead. If TD Securities is correct, with December core PCE expected to rise 0.25% month-on-month, traders should brace for potential volatility in both forex and crypto markets. A higher-than-expected PCE could lead to speculation about interest rate hikes, impacting the USD and risk assets. Watch how the dollar reacts—if it strengthens, we might see pressure on cryptocurrencies like Bitcoin and Ethereum, which often move inversely to the dollar. But there’s a flip side: if the PCE comes in lower than expected, it could ease fears of aggressive rate hikes, providing a boost to equities and riskier assets. Keep an eye on the 2.9% annual rate; a miss here could shift market sentiment significantly. Traders should monitor the immediate reaction post-release, especially in the forex pairs like EUR/USD and GBP/USD, as well as crypto markets, for signs of trend reversals or continuations.