Forex Today: Markets Await US CPI Data

Adam Lemon

Markets are awaiting key US inflation data which will be closely watched for signs that the Fed is succeeding in bringing down the rate.

  1. There will be a release of US CPI (inflation) data today, a major event which will be carefully watched as analysts hope to see further evidence that inflation in the US has peaked. Last month saw the first decline in a long while, and it is expected that the month-on-month change will be slightly negative at -0.1%. If the data is significantly higher, it will probably create more hawkish expectations from the Fed and so boost the USD – or vice versa if the decline is higher than expected.
  2. Global stock markets are mostly higher although Asian markets have not gained as strongly as they did yesterday. The S&P 500 Index made its fourth consecutive day of firm gains yesterday.
  3. In the Forex market, the US Dollar continues to weaken slightly, with more action in the Japanese Yen which, it is speculated, will begin to benefit from supportive intervention by the Bank of Japan, which has $12 trillion in currency reserves. It is clear that Japanese policymakers do not want to see the USD/JPY currency pair above ¥145 and probably really want to see it stabilise somewhere below that level. There is still a strong, long-term bullish trend in the US Dollar, and we are likely to see the currency continue to advance over the coming days, unless contradicted by the US inflation data release today.
  4. Bitcoin/USD has risen for the sixth consecutive day to reach a new 3-week high well above $22k.
  5. UK GDP came in slightly lower yesterday than had been expected, increasing by 0.2% month-on-month when an increase of 0.3% had been expected.
  6. Sunday’s election in Sweden looks likely to deliver a change in government from left to right by a very narrow margin, but the final result will not become known until tomorrow.
  7. Daily new coronavirus cases globally dropped last week for the eighth consecutive week, giving rise to the hope that the pandemic is finally over in any meaningful sense.
  8. It is estimated that 67.8% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 7.8% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.  
  9. Total confirmed new coronavirus cases worldwide stand at over 614.2 million with an average case fatality rate of 1.06%.  
  10. The rate of new coronavirus infections appears to now be most significantly increasing in Taiwan and Russia.  
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

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