What you need to know on Thursday, August 12:
The US dollar advanced during the first half of the day, but ended the day in the red against most major rivals. The dollar changed course after the release of the US inflation data, as the annual figure was confirmed at 5.4%, although the underlying figure was revised down by 4.3%, the first sign of inflation may be reaching its peak.
Meanwhile, Fed officials continued to cool downside expectations. The president of the Federal Reserve of Kansas City, Esther George, said that the time has come to modify the configuration of monetary policy, although she added that the reduction does not imply any subsequent adjustment of the policy rate. Furthermore, he also noted that the road ahead towards policy normalization “is likely to be long and bumpy.”
Wall Street got a boost from US inflation headlines, with the DJIA and S&P 500 hitting new all-time highs. The Nasdaq Composite was unable to follow suit and closed again in the red.
The EUR / USD pair recovered from a new low at 1.1705, but the recovery stalled around 1.1750, keeping the tone tepid. GBP / USD performed similarly, approaching the 1.3900 level before reversing. The USD / JPY pair settled around 110.40, correcting but still ready to move forward.
Commodity-linked currencies also advanced within familiar levels. Gold prices made a good recovery amid falling demand for the dollar. The shiny metal closed at $ 1,751.30 a troy ounce. Crude oil prices ignored a disappointing report from EU stocks as the EIA oil stocks change posted -0.447 million, worse than expected.
US Treasury yields spiked ahead of US inflation figures, but then receded, ending the day slightly bearish.
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