Forex Today: US Inflation Eases

Adam Lemon

A potential peak in US inflation has been somewhat overshadowed by slowing Chinese economy.

  • US CPI (inflation) showed a drop in the monthly increase from 0.5% to 0.3%, undershooting the expected monthly increase of 0.4%. This suggests the current bout of inflation may have already peaked, giving credence to the Fed’s recent insistence that it is a transitory phenomenon. However, the data had little impact upon the US dollar and US stock markets closed lower.

Advertisement
Heavy swings in the dollar make highly profitable trades

Make Your Move Now!

  • Poorer-than-expected Chinese retail sales data (an annualized increase of only 2.5% compared to the 7% which had been expected) and domestic coronavirus curbs have raised fears of a slowing Chinese economy, denting global growth prospects in the eyes of many analysts.

  • Energies are performing strongly, with natural gas hitting multi-year high prices above $5, and WTI Crude Oil trading at a 6-week high above $70 per barrel. Markets have become more concerned about US supply chain issues potentially affecting energies.

  • The Forex market is relatively quiet, with the Japanese yen looking like the strongest currency on risk-off sentiment while the commodity currencies (AUD, CAD, NZD) look relatively weak.

  • Bitcoin and most other cryptocurrencies have looked weak and heavy after their sharp, sudden falls last week. However, Bitcoin stands out as it is showing signs of recovery.

  • Today will see releases of British and Canadian CPI (inflation) data which may trigger price movement in GBP and CAD.

  • Last week saw the third consecutive weekly fall in global new confirmed coronavirus cases after over 2 months of weekly rises, suggesting the current wave driven by the delta variant may have peaked.

  • It is estimated that 42.3% of the world’s population has had at least one dose of a coronavirus vaccination.

  • Total confirmed new coronavirus cases worldwide stand at over 226.6 million with an average case fatality rate of 2.06%.

  • The rate of new coronavirus infections appears to now be increasing most quickly in Australia, Austria, Barbados, Bosnia, Cambodia, Croatia, Egypt, Estonia, Latvia, Lithuania, Moldova, Philippines, Romania, Serbia, Singapore, and Slovenia.

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.