US inflation data released yesterday left the door open for another interest-rate hike this year, even as policymakers showed themselves to be cautious ahead of the next meeting. Core CPI, the best measure for underlying inflation, increased 0.3% MoM but in line with estimates. Headline CPI crept up to 0.4%, above expectations, due to an increase in energy costs.- The US dollar continues to reign, and it is set to post a 4-week gain as CPI data boosted yields higher on sentiment that the Fed may keep interest rates higher for longer.
In Europe, Swedish, French and Spain CPI are due along with Eurozone Industrial production, and the euro trades mid 1.05-1.06 against the US dollar.- EUR/USD continues to trade in a bearish trend, and we tried to break the upper part of the downward channel yesterday afternoon, but the market clearly showed its positioning after US CPI, and the euro was sold. We are currently trading lower at 1.0539.
GBP/USD also dropped on US CPI news, dropping from 1.2320 to 1.2174. The market is in syntony, and it feels like it will look out for reasons to short the sterling.
CPI in China is back to zero, indicating demand remains too weak to move prices. The gauge was unchanged at 0.1%, following August’s print while the estimates were 0.2%. USD/CNH trades at 7.3068 after advancing 0.1% last night, and USD/CNY muted at 7.3058.
Oil is set to finish the week with a modest gain as fears of the Israel-Hamas conflict disrupting the Middle East and compressing global oil supply build up.
We are using cookies to give you the best experience on our website. Download the GPS Cookies Policy for more information. The main types of cookies we use are as follows: strictly necessary cookies, performance cookies, advertisement cookies, and analytics cookies. You can find out more about which cookies we are using or switch them off in settings. Except for strictly essential cookies, you have also the option to decline the usage of cookies at any time. You can do this through this cookie management panel, which appears when you first visit, and you can access it independently through the link provided at the foot of the page.