Economic data is light, but we do hear from some central bank speakers, the most important of which will be the Fed's Waller. Recall that he delivered the definitive and market-moving ‘something appears to be giving’ speech in late November. Back then, it concluded that the conflict between strong US growth and disinflation appeared to be resolving in the favour of disinflation. We presume today that he will stick to that same core message of successful disinflation and will not want to get involved in the fine-tuning of discussing a 2024 easing cycle, but not starting in March. We thus see event risk as a benign one – slightly negative for the Dollar and positive for risk.

DXY has clear resistance at 103.10/103.20 and the case we have outlined above suggests that these levels may well prove the top of the day's trading range.

If we are wrong and Waller has been sent out to push back against aggressive easing expectations (market price 18 bps of a 25 bpw first cut in March and 158 bpw of easing this year) then DXY can break resistance and head to the 104.00/104.25 area multi-day.