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USD rebounds in big post-CPI moves

“Don’t spread yourself too thin… focus trumps freneticism any day.” - John Coleman

 

 

HEADLINES

 

 

  • CPI softens but dollar dip doesn't last
  • GBP/USD retreats back under 1.3850 after hitting monthly highs above 1.3900
  • Gold Back Above $1,800 as U.S. Consumer Inflation Underwhelms
  • Crude Oil Rallies Above $70 as Another Hurricane Menaces Texas
  • Equities fall as U.S. inflation data raises more questions
  • Apple Launches iPhone 13 With Camera, Chip and Screen Upgrades
  • USD to gradually strengthen over the coming quarters – HSBC

 

 

FOREX

 

 

CPI softens but dollar dip doesn't last

 

The story in markets today was simple enough in the early going. US CPI was lower than expected and the dollar fell. Core CPI rose just 0.1% compared to 0.3% expected. The dollar fell around 30 pips initially across the board and later extended that to 50 pips.

However the move wouldn't last. When equity markets opened (higher at the time) the sentiment quickly began to shift. Stocks began to struggle, and the mood quickly shifted towards risk aversion. That meant buying in JPY, CHF and USD. The moves extended as the day wore on. There wasn't a clear catalyst but you could point to China, bottlenecks or options activity.

 

GBP/USD retreats back under 1.3850 after hitting monthly highs above 1.3900

 

The GBP/USD was unable to hold above key technical levels and pulled back amid a recovery of the US dollar. Cable peaked after the beginning of the American session at 1.3913, the highest level in a month and then weakened. It erased most of its daily gains and it is hovering slightly below 1.3850. Data released earlier on Tuesdays showed an improvement in the UK Job market.

 

 

COMMODITIES

 

 

Gold Back Above $1,800 as U.S. Consumer Inflation Underwhelms

 

Gold returned to above the key $1,800 an ounce level on Tuesday as U.S. consumer inflation data for August came in within expectations, allaying some investors’ concerns that the Federal Reserve will resort to a faster-than-expected taper of its economic stimulus. The U.S. Consumer Price Index expanded by 5.3% in August from the prior year, moderating from July’s growth of 5.4%, as per economists’ projections.

 

Crude Oil Rallies Above $70 as Another Hurricane Menaces Texas

 

Oil ended the session little changed as investors tracked U.S. dollar movements and concerns faded around Hurricane Nicholas’ threat to crude supply in the U.S. Gulf of Mexico. Futures in New York erased nearly all gains, yet still managed to close at the highest since early August on Tuesday. The dollar advanced, reducing the appeal of commodities priced in the currency.

 

 

STOCKS

 

 

Equities fall as U.S. inflation data raises more questions

 

Global markets edged lower and the dollar fell on Tuesday after data showed U.S. inflation rose by less than expected, raising renewed questions on when the U.S. central bank will begin tapering its asset purchases. MSCI's world stocks benchmark fell 0.23%, and all of the major U.S. stock indexes were down by mid-afternoon New York time.

 

Apple Launches iPhone 13 With Camera, Chip and Screen Upgrades

 

Apple Inc. unveiled a new iPhone 13 at a wide-ranging product event Tuesday, looking to entice consumers with improvements to the camera and processor in lieu of major design changes. The new models -- iPhone 13, iPhone 13 mini, iPhone 13 Pro and iPhone 13 Pro Max -- were introduced at a media event dubbed California Streaming.

 

 

ANALYSIS

 

 

USD to gradually strengthen over the coming quarters – HSBC

 

“We still believe the USD is gradually transitioning to a stronger path for two key reasons. First, global growth may be losing speed but is not seen as decelerating quickly. If we believed the latter could occur, then we would factor in a much steeper USD climb. Second, the Fed is edging closer towards eventual rate hikes, which should support the USD, especially when tapering actually starts.”

 

 

CHART

 

 

British pound / US dollar – Daily Candlesticks

Source: GKFX Prime Metatrader 4

GBP/USD has made a false breakout above 1.39 and resistance at 1.389 and dropped 100 pips down to 1.38. On the daily chart it shows a bearish engulfing candlestick. - Prepared by Trading Writers*,

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

 

SOURCE

 

 

https://www.fxstreet.com/economic-calendar
https://www.investing.com/news/commodities-news/gold-back-above-1800-as-us-consumer-inflation-underwhelms-2616174
https://www.investing.com/news/economy/dollar-holds-tight-range-as-investors-await-us-inflation-data-2615187
https://www.fxstreet.com/news/gbp-usd-retreats-back-under-13850-after-hitting-monthly-highs-above-13900-202109141530
https://finance.yahoo.com/news/apple-launches-iphone-13-camera-184542136.html
https://www.fxstreet.com/news/usd-to-gradually-strengthen-over-the-coming-quarters-hsbc-202109140803

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