Movement in foreign exchange markets was slow in the second half of the date following Federal Reserve Chairman Jerome Powell’s two-day congressional testimony. Thursday’s financial calendar will include US consumer price index (CPI) data for June, which is likely to increase volatility. Weekly initial jobless claims from the United States can also be viewed closely by members.
The table below shows the ratio trading of the US Buck (USD) against the major currencies listed on this date. The US buck was at one time its weakest against the British pound.
| USD | EUR | gbp | JPY | scurvy | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.00% | -0.40% | 0.57% | -0.10% | -0.10% | 0.74% | 0.33% | |
| EUR | -0.00% | -0.20% | 0.91% | 0.22% | 0.07% | 1.08% | 0.66% | |
| gbp | 0.40% | 0.20% | 1.06% | 0.44% | 0.27% | 1.29% | 0.86% | |
| JPY | -0.57% | -0.91% | -1.06% | -0.65% | -0.63% | 0.34% | -0.19% | |
| scurvy | 0.10% | -0.22% | -0.44% | 0.65% | -0.03% | 0.84% | 0.44% | |
| AUD | 0.10% | -0.07% | -0.27% | 0.63% | 0.03% | 1.01% | 0.60% | |
| NZD | -0.74% | -1.08% | -1.29% | -0.34% | -0.84% | -1.01% | -0.41% | |
| CHF | -0.33% | -0.66% | -0.86% | 0.19% | -0.44% | -0.60% | 0.41% |
The heat map shows the share adjustments of the main currencies against each occasion. The lower forex is selected from the left column, the moment the quote forex is selected from the ruling row. As an example, when you select US Buck from the left column and move to JPY with the horizontal layout, the ratio trade displayed within the field will constitute USD (bottom)/JPY (quote).
Fed Chairman Powell reiterated his prepared observations before the US Regional Monetary Services and Products Committee on Wednesday and avoided giving any unproven clues regarding the timing of the interest rate relief. However, Wall Side Road’s main index posted strong gains in midweek and made it difficult us buck (USD) to accumulate power against its major competitors. After recording small losses on Wednesday, the USD index remained steady at around 105.00 early Thursday. On an annual basis, the CPI is projected to increase by 3.1%, while the core CPI is increasing by 3.4%.
Advisors smooth out inflationary or deflationary trends by periodically adding up the costs of a basket of goods and services and presenting the information in the form of a consumer price index (CPI). CPI data is compiled on a monthly basis and compiled through the US Field of Work Statistics. A year-on-year study compares the prices of products at a reference event with the same event a year earlier. The CPI Generally speaking, a top reading is a bullish signal for the US Buck (USD), while a bottom reading can be seen as bearish.
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Data published by the United Kingdom’s Office for National Statistics confirmed in EU Morning that gross domestic product rose by 0.4% on a monthly basis in May. The study came in better than market expectations for a range of 0.2%. The nearest end point in the given range on Wednesday, GBP/USD The uptrend continued and was closing at its strongest level since the beginning of March with visible trading above 1.2850.
EUR/USD The USD benefited from a mild bullish pressure environment ahead of schedule on Wednesday and the date closed in the range. The pair holds its ground on Thursday and moves higher towards 1.0850.
The Melbourne Institute reported in the Asian session that consumer inflation expectations fell to 4.3% from 4.4% in July. AUD/USD This knowledge largely went unnoticed and the pair closed marginally higher with visible buying and selling for the date above 0.6750.
USD/JPY Remains in a consolidation phase above 161.50 in a fixed range till the end of the first 3 days to date. Data from Japan showed equipment orders fell 3.2% on a monthly basis in May.
Sleep It reached $2,390 on Wednesday, but wiped out a large portion of its daily gains during US trading hours. XAU/USD is struggling to wrap up the bullish momentum, but held modest day-to-day gains near $2,380 in the early European session.
Inflation measures the increase in the cost of products and a nominal basket of products and services. Headline inflation is usually expressed as share trading on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation does not include more volatile factors such as food and gasoline which may vary due to geopolitical and seasonal factors. Core inflation is the figure that economists focus on and is the limit set by central banks that is mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures trade in products and the cost of a basket of products and services in the current period. It is usually expressed as stock trading on month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure concentrated by central banks because it does not include volatile food and gas inputs. Interest rates generally increase when the core CPI rises above 2% and vice versa when it falls below 2%. Since upper rates of interest are fixed for a foreign currency, higher inflation generally leads to a more powerful foreign currency. The second is true if inflation falls.
Despite the fact that it seems counter-intuitive, high inflation in a country increases the value of its currency and vice versa for low inflation. This is because the central bank typically keeps interest rates high to fight inflation, which attracts additional international capital inflows from buyers looking for a profitable playground to park their money.
In the past, gold used to be a buy asset in times of high inflation because its value remained intact, and while investors consistently buy gold for their safe-haven homes in times of market turmoil, this is not the case for many. This is because when inflation peaks, central banks will raise interest rates to fight it. Higher rates of interest are detrimental to gold because they create an opportunity cost of holding gold or hanging on to cash in a cash reserve account versus interest-bearing assets. On the other hand, low inflation is a certainty for gold as it lowers interest rates, making the noble metal a more viable investment addition.
This post was published on 07/11/2024 12:59 am
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