The Fed could respond by maintaining interest rates at current levels for longer to curb spending and dampen demand-driven inflation.
Producer price numbers for December will garner investor interest on Friday. A pickup in demand could allow producers to pass rising costs to consumers by raising prices. Producer prices are leading indicators for consumer price inflation.
Other stats include trade data and the weekly jobless claims report. However, barring a marked increase in US initial jobless claims, the focus will be on the inflation reports.
Beyond the numbers, FOMC member commentary also needs monitoring. Reactions to the US Jobs and Inflation reports would move the dial.
The EUR
The German economy will put the EUR/USD in focus early in the week. On Monday, German factory orders and trade data will draw investor interest. Recent economic indicators, including private…
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