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Forex Today: Attention focuses on inflation data after dollar rebound

We will report on Tuesday the US Consumer Price Index. In addition, the Production Price Index will be published on Wednesday. The Eurozone will report on GDP growth, and the UK will publish data on employment and inflation. Australia will also publish employment data. The bond market and geopolitics will continue to be important factors influencing the market.

Here’s what you need to know for next week:

The Dollar Index (DXY) rose for all five days of the week, but it was not enough to completely erase last week’s losses. The correction and Powell’s comments helped the Dollar, which was not affected by signs of gradual easing in the labor market. With the US economy outpacing that of the euro zone, the dollar’s decline could be limited. The DXY rose from six-week lows below 105.00 towards 106.00.

On Tuesday the Consumer Price Index (CPI) will be published and on Wednesday the Producer Price Index (IPP). A surprise could turn the tables.

The bond market will continue to be the focus. Weakness in the 30-year Treasury auction prompted sharp moves, as did comments from Federal Reserve Chair Powell. The rebound in yields could signal the end of the bond rally that began in October.

Those responsible for the European Central Bank (ECB) offered different perspectives for the future. In the short term, the ECB is not expected to raise rates further, with debate surrounding when it will start cutting rates amid a negative economic outlook. Eurostat will publish employment and growth data on Tuesday.

The pair EUR/USD failed to hold above 1.0700 and retreated, finding support above 1.0650. The pair offers mixed signals. The upside faces a strong barrier around 1.0800, which includes the 20-week Simple Moving Average (SMA).

The pound was hit by dovish comments from Bank of England (BoE) officials. Third quarter growth data exceeded expectations, but only to show the stagnation of the economy. Next week, the UK will report on employment on Tuesday and inflation on Wednesday. These figures will be crucial ahead of the next BoE meeting on December 14. GBP/USD It retreated to the 20-day SMA around the 1.2200 area, which is crucial support. A break lower would clear the way for more losses. EUR/GBP posted the highest weekly close since April, around 0.8735.

USD/JPY surpassed 151.50 and recorded the highest weekly close since 1990. The pair is trading at levels compatible with the intervention of the Japanese authorities.

The Reserve Bank of Australia (RBA) raised interest rates by 25 basis points, but it was a moderate hike as it signaled that the tightening cycle is over and weighed on the Australian dollar. Australian yields fell during the week based on guidance offered by the central bank. The Wage Price Index for the third quarter will be published on Wednesday and the employment report on Thursday. The Australian dollar was the worst-performing currency among the major currencies. AUD/USD erased most of last week’s gains, retreating from the 20-week SMA after failing to hold above the 0.6500 area.

NZD/USD retreated from the 20-week SMA to levels below 0.5900. Consolidating below 0.5850 would expose the 2023 lows. New Zealand’s Q3 Producer Price Index will be released on Friday.

The Chilean peso was one of those that lost the most during the week, with the USD/CLP rising from 880.00 to 920.00 after the annual inflation rate in Chile fell to 5%, raising expectations of further easing of monetary policy.

Crude oil prices fell for the third consecutive week on demand concerns. The WTI It fell above $80.00 and bottomed slightly below $75.00, settling around $77.50.

He Gold experienced a significant decline, losing more than $50 during the week and falling as low as $1,934. This drop can be attributed to rising yields and the strength of the Dollar. Similarly, the Silver It encountered resistance around the $23.00 level and subsequently fell to $22.20, marking its lowest close since early October.

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Source: Fx Street

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