empty
08.08.2023 11:21 AM
Rising US inflation drives dollar up

Stock trading ended mixed on Monday. It seems that the market continues to focus on important US economic data due out this week, as it could be crucial not only for the local financial market but for global markets as a whole.

After a series of statements made by Fed members about the need to continue raising rates and the decision by Fitch Ratings to downgrade the US credit rating, a sort of equilibrium emerged in the markets. Investors likely shortened their activity in currency markets, clearly reflected by the dynamics of the ICE dollar index, which recently showed an attempt to rise above 102.00 points. Currently, it lies at 102.01 points. Market players probably understood that inflation may surge again and economic growth may decline if the Fed raises rates further, especially amid subsequent negatives for financial markets.

Although the US stock market rose, it will likely consolidate until the publication of consumer inflation data this Thursday. Forecasts say there will be a noticeable increase in the index, by 0.3% y/y.

Many expect another rate hike of 0.25% at the September meeting, but this scenario will happen only if inflation rises. In that case, dollar demand will surge, while the local declines in stock markets will continue and could evolve into a full-scale correction. Yields on government bonds may again aim for new highs.

Forecasts for today:

This image is no longer relevant

This image is no longer relevant

GBP/USD

The pair trades downward in the short-term and may consolidate below 1.2800. If US inflation increases, the decline will continue to 1.2600. Meanwhile, a rise above 1.2800 due to other inflation news could lead to an increase in price to 1.2990.

USD/CHF

The pair trades within the range of 0.8700-0.8800, and may remain in this area until the release of the consumer inflation data in the US. If the report shows the anticipated increase, the pair will rise to 0.8875. But if the data falls short of 3.0% y/y, the pair may break out of the range and drop to 0.8600.

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/JPY. Analysis and Forecast

Today, the USD/JPY pair is struggling to benefit from a slight intraday upward movement, especially amid expectations that the Bank of Japan may raise interest rates at a faster pace

Irina Yanina 11:37 2025-04-01 UTC+2

US stock market: bad news fully priced in

The S&P 500 had its worst quarter in three years. Investors are shifting capital from North America to Europe. Once-booming US tech stocks have collapsed. Major banks and respected institutions

Marek Petkovich 09:13 2025-04-01 UTC+2

April to play crucial role in Europe's gas future

Europe's gas sector is entering a critical phase, as the end of the heating season sets the stage for refilling storage facilities, which are now two-thirds empty after the winter

Miroslaw Bawulski 13:01 2025-03-31 UTC+2

WTI – West Texas Intermediate. Prices Lack Support for Growth

West Texas Intermediate (WTI) crude oil prices are attempting to attract buyers, but the market remains in a state of uncertainty. Concerns over President Trump's aggressive trade tariffs are putting

Irina Yanina 12:39 2025-03-31 UTC+2

EUR/USD. Analysis and Forecast

At the start of the new week during the Asian session, the EUR/USD pair attempted to attract buyers, but this was unsuccessful. The euro received support from easing concerns about

Irina Yanina 12:35 2025-03-31 UTC+2

US stock market runs into trouble

Rumors about mutual tariffs and another blow to consumer confidence triggered the second-worst sell-off of the S&P 500 this year. Investors are still holding piles of US stocks

Marek Petkovich 10:58 2025-03-31 UTC+2

EUR/USD. Hello, April: Eurozone Inflation Report, ISM Indices, and Nonfarm Payrolls

The first week of every month is the most informative for EUR/USD traders. The economic calendar traditionally includes a report on inflation growth in the eurozone, American ISM indices

Irina Manzenko 06:28 2025-03-31 UTC+2

GBP/USD Pair Overview – March 31: Nonfarm Payrolls, Trump, and Unemployment May Create New Problems for the Dollar

The GBP/USD currency pair continued to trade sideways near its highs on Friday. This sideways movement has persisted for several weeks, and the British pound has not managed even

Paolo Greco 06:24 2025-03-31 UTC+2

EUR/USD Pair Overview – March 31: A New Week of Trials for the Dollar

The EUR/USD currency pair rose again on Friday. As we can see, the correction against the upward trend of recent weeks ended very quickly. But that's no surprise, given that

Paolo Greco 06:24 2025-03-31 UTC+2

What to Pay Attention to on March 31? A Breakdown of Fundamental Events for Beginners

There are very few macroeconomic events scheduled for Monday. The only somewhat interesting reports will come from Germany. Retail sales and inflation data for March will be released. However, we'd

Paolo Greco 03:21 2025-03-31 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.