Forex Today: Powell Talks Down US Inflation

Adam Lemon

Jerome Powell says Fed ready to change policy if inflation persists.

  • Jerome Powell, the Chair of the Federal Reserve, testified before Congress yesterday. He stated that the Fed is not watching specific data points to determine taper thresholds, while essentially dismissing currently high inflation as a temporary effect of the post-coronavirus shock reflation. Markets reacted little to the testimony.
  • In the Forex market, the Canadian dollar was boosted slightly by the Bank of Canada’s announcement that it would reduce its bond purchase program. The Forex market is mostly indecisive, but currently the Japanese yen is showing the greatest short-term strength, while the British pound has the greatest short-term weakness.

Advertisement
The yen is a popular asset during turbulent times.

  • Cryptocurrencies are mostly weak, with Bitcoin threatening to make a major bearish breakdown below $30k, while Ethereum is well established below the pivotal point at $2040. If Bitcoin breaks below $28k it will be quite likely to fall quickly to $20k or even $10k.
  • Data released yesterday showed Chinese GDP increasing at an annualized rate of 7.9% which was roughly in line with the market’s expectation.
  • U.S. PPI data came in at a 1% increase, much higher than the expected 0.6%, continuing to stoke fears of resurgent inflation.
  • Australian employment data came in stronger than expected, with the unemployment rate falling to 4.9% against an expected 5.1%.
  • Later today, we will get key releases of New Zealand inflation data and the Bank of Japan’s Outlook Report.
  • Last week saw a third consecutive weekly rise in global new confirmed coronavirus cases, suggesting that the pandemic is advancing again due to the spread of the more highly infectious Delta (Indian) variant.
  • It is estimated that 25.6% of the world’s population has received at least one vaccination against the novel coronavirus.
  • Total confirmed new coronavirus cases worldwide stand at over 189.1 million with an average case fatality rate of 2.15%.
  • The fastest progression in terms of immunizing a population against the coronavirus in all but the smallest states has been in Singapore, Iceland, Malta, Bermuda, Bahrain, Denmark, Finland, Mongolia, Kuwait, Bhutan, Israel, Chile, Uruguay, and Canada, which have given at least one shot to between 85% and 63% of their respective populations. However, even countries with high vaccination rates are seeing increases in new cases. For most of the world, a vaccine still remains distant.
  • The latest data suggests that coronavirus vaccines are only about 65% in effective in preventing infection by the delta (Indian) variant. There is fresh data from Israel which seem to suggest diagnosed cases of infection among vaccinated people are just as likely to require hospitalization as those among unvaccinated people.
  • The rate of new coronavirus infections appears to now be increasing most quickly in Algeria, Bangladesh, Belarus, Burma, Cuba, Cyprus, Denmark, Fiji, Finland, Georgia, Greece, Guatemala, Indonesia, Iran, Iraq, Japan, South Korea, Laos, Malaysia, Malta, Mexico, Morocco, Netherlands, Portugal, Pakistan, Russia, Senegal, Spain, and the United Kingdom.
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.