Inflation in the United States is the focus of attention in the currency market at the moment.
The U.S. dollar It recovers ground this Tuesday and gains strength from the losses it recorded the previous day. This occurs at a time when the traders They are reevaluating their positions due to the news of a possible increase in inflation In U.S.A.
The index of the dollarwhich closely follows the evolution of this currency compared to six other major currenciesregisters an increase of 0.1%, reaching a level of 104,332. This rally follows a 0.5% drop in the previous session, which represented a decline from six-month highs reached last week at 105.15.
Inflation: the data observed by the market
The inflation in the United States is the center of attention in the forex market right now. The next release of consumer inflation data, scheduled for Wednesday, twill have a major impact on the Federal Reserve meeting of the following week. Although the central bank is expected to keep interest rates unchanged in September, signs that inflation remains strong could lead to a hike before the end of the year.
United Kingdom: another important fact
In the UK context, the GBP/USD pair shows little change and remains stable at the 1.2505 level, as traders digest the latest employment data in the country. Although the unemployment rate in that country increased to 4.3% between May and July, compared to 4.2% From the previous month, its highest level since the third quarter of 2021, salaries without bonuses have registered an increase of 7.8% compared to the previous year. This is the fastest rate since this data began to be recorded in 2001, which puts greater pressure on the Bank of England to further tighten its monetary policy. The central bank is expected to raise interest rates by another 25 basis points.
In Europe, the EUR/USD pair falls 0.1% to 1.0732, after inflation data in Spain, published in august, were in line with expectations, with an annual increase of 2.6% compared to 2.3% the previous month. He European Central Bank will meet on Thursday and, having raised rates in each of its last nine meetings, policymakers are debating whether to raise deposit rates againwhich currently stand at 4%, or take a break. Although inflation remains high, economic growth in the region is slowing, and ZEW economic confidence data is expected Germany that could show a deterioration in confidence in the eurozone economy.
The USD/JPY pair is up 0.2% to 146.87, reversing some of the previous day’s significant gains. This comes after statements by the governor of the Bank of JapanKazuo Ueda, who has suggested that the end of the Bank of Japan’s negative interest rates could be near. Although this could be positive for the yen, the Japanese currency has seen heavy losses throughout the year due to the growing gap between local and international interest rates.
The pair USD/CNY rises 0.1% to 7.2924, remaining above Friday’s 16-year low. This follows the publication by the Chinese central bank from a series of stronger daily midpoints. However, concerns remain about the strength of China’s economic recovery after the Covid-19 crisis. A Reuters poll predicts 5% GDP growth by 2023a figure that coincides with China’s official forecast but does not meet the expectations of investment banks.
Source: Ambito
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