Forex Today: Dramatic U-turn after US inflation misses expectations – by ValBednarik EURUSD GBPUSD XAUUSD CryptoCurrencies Fed
US inflation put market players on their toes on Thursday and was behind some wild, volatile moves.was up by 8.2% YoY in September, above the 8.1% expected, although easing for a third consecutive month. The core annual inflation, on the other hand, reached a fresh multi-year high of 6.6%. The initial reaction to the news was negative. Wall Street plummeted, yields soared, and the dollar surged.
Fed swaps fully price a 75 bps rate hike in November and a peak policy rate of 4.85% in March 2023. Pretty much the same picture that we had before the release, partially explaining equities comeback. No news was seen as good news after second thoughts.Rumors and back and forth about the United Kingdom’s mini-budget ended, favoring the Pound demand and adding pressure on the American currency.
could ignite a third-world war. Also, coronavirus-related restrictions in Shanghai, China, fueled fears of another massive lockdown in the region. Meanwhile, German Health Minister Karl Lauterbach calls for the reintroduction of mask mandates, citing a "sharp increase" in covid cases.trades around 0.9770, while GBP/USD holds on to substantial gains around 1.1315. Commodity-linked currencies plummeted ahead of Wall Street’s opening but managed to post gains against the dollar.
USD/JPY reached a fresh multi-decade high of 147.66. Investors fear a potential BOJ intervention after the pair resumed its advance., despite off its intraday low, now trading around $1,663 a troy ounce.Wall Street was extremely volatile. The Dow Jones Industrial Average added roughly 850 points after trading over 500 points in the red ahead of the US inflation release. The S&P 500 and the Nasdaq Composite added over 2% each.
The Asian session will bring Chinese inflation and trade data, which could affect the market’s sentiment. Later on Friday, the US will publish US Retail Sales.
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