Traders don’t expect strong changes in the currency market after CPI data

Amid the U.S. inflation data, which is releasing on Tuesday, traders are preparing for significant fluctuations in the stock market in the near future. Currency traders seem calmer. 

While fluctuations in the major currencies (yen, euro, Australian dollar, etc.) are likely to occur, they will be much lower than the fluctuations that these currencies experienced during the year. Thus, a move outside the current trading ranges is unlikely.

Options markets are forecasting a 72% probability of a trading range of 135.6–139.7 yen per dollar after the consumer price index (CPI) data is announced. Since November 30, the range of Japanese national currency has been 133.63–139.89 yen per dollar, according to Bloomberg. Hence, it proves that there will be no serious fluctuations. The same can be said about the Australian dollar. According to forecasts, it will trade between $0.6647 and $0.6853, which is within the current trading range.

Released November's data is expected to confirm forecasts of a fall in inflation from 7.7% to 7.3%. In that case, expectations of a slowdown in the pace of the Federal Reserve's rate hikes at its upcoming meeting on Wednesday would look more plausible.