Mounting inflation pressures | 31 Januari 2022

USDJPY trading plan:

Mounting inflation pressures could force the Fed to rapidly hike interest rates, stifling growth, investors have warned. The big issue is the Fed, which is clearly in a tightening cycle. The prospect of faster or larger U.S. interest rate hikes and possible stimulus withdrawal lifted the dollar index. The 2-year and 10-year yield curve steepened to as much as 65.10 basis points, after hitting its narrowest spread since November 2020. Fed funds futures traders are pricing in almost five interest rate increases by year-end, with four likely by September. This is a positive signal for the dollar.

Investment idea: buy 114.99 and take profit 115.60.