The key data of the day will be the US CPI for July. During the Asian session, wholesale inflation data will be released in Japan and, in Australia, the report on inflation expectations from the Melbourne Institute.
Here’s what you need to know on Thursday, August 10:
Thursday is the key day of a relatively quiet week in terms of economic data, with the focus on US inflation data. The Consumer Price Index (CPI) is expected to show an annual rate rebound from 3% to 3.3%, while the core rate is expected to hold at 4.8%. The weekly report on applications for unemployment benefits will also be relevant.
US inflation figures are likely to cause volatility, with market participants eagerly awaiting the data. Prior to the report, the US dollar had mixed results on Wednesday, generally maintaining relative strength.
US stocks fell, with the Nasdaq shedding 1.17% and the Dow Jones shedding 0.54%. Crude oil prices, by contrast, hit new multi-month highs, with WTI rising 1.60% a barrel and breaking above $84.00.
US 10-year Treasury yields received decent demand. Its yield fell slightly to 4.01%, while the 2Y rebounded to 4.80%.
In a quiet session for currencies, the Dollar Index experienced a modest decline, consolidating around 102.50 as market participants await US inflation data.
The EUR/USD pair rose slightly to 1.0970 as the euro fared better following the Italian government’s decision to ease the tax on windfalls by banks, limiting payments. The European Central Bank (ECB) will publish its Economic Bulletin, and Italy will report the final inflation reading for July.
USD/CHF rose for the second day in a row, but remains below 0.88000. EUR/CHF bounced from 0.9580 to 0.9630 on Wednesday after clarification on Italy’s new Extraordinary Taxes on banks.
GBP/USD remains range bound around 1.2750. On Friday, the UK will report on GDP and industrial production.
USD/CAD rose marginally, closing slightly above 1.3420, but still far from its highs.
Commerzbank analysts on CAD:
The Bank of Canada unexpectedly ended its interest rate pause in early June. Since then it has raised the interest rate in two stages to 5%. Market expectations for further rate hikes later in the year recently fell apart, weighing on the CAD in early August, as did global factors. However, we maintain our outlook and see a moderate recovery potential for the CAD in the medium term.
The AUD/USD pair traded within the range on Tuesday, remaining stuck near 0.6540. The bias continues to be down, influenced by cautious market sentiment and falling commodity prices. On Thursday, the Melbourne Institute will publish the report on inflation expectations.
The NZD/USD pair posted its lowest daily close in two months around 0.6050, but managed to hold above the key support level of 0.6030.
Gold prices continued lower, marking the third straight day of losses and posting the lowest daily close in a month at $1,914. Similarly, silver also lost ground, falling to $22.65. Precious metals remain under pressure, struggling to start a sustainable recovery and showing no signs of correction.
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
