December’s softer-than-expected US core CPI suggests tariff-driven inflation pressures may be fading, but shutdown-related distortions leave markets confident the Fed will hold rates steady in January, OCBC’s FX analysts Sim Moh Siong and Christopher Wong note.
💡 DMK Insight
The recent US core CPI data is a game changer for traders: it hints at easing inflation pressures, which could stabilize interest rates. With the Fed likely to hold rates steady in January, this creates a more predictable environment for forex and crypto traders alike. If inflation continues to cool, we might see a shift in risk sentiment, potentially benefiting riskier assets. Watch for how this plays out in the USD pairs; a stronger dollar could pressure commodities and crypto prices. The market’s confidence in the Fed’s stance suggests that traders should monitor key levels in the USD index and related currency pairs for potential breakout opportunities. But don’t overlook the shutdown-related distortions; they could create volatility in the short term. Keep an eye on the upcoming economic indicators for any surprises that might shake this newfound stability.
📮 Takeaway
Watch the USD index closely; a stable Fed could lead to breakout opportunities in forex and crypto markets, especially if inflation trends continue to ease.





