US dollar trades in the green against the G10 basket of currencies.
The US Dollar (USD) rallied again this week, with speculators pushing US Treasury rates higher ahead of September’s Consumer Price Index (CPI) data. Higher US interest rates make the US Dollar a popular carry currency again. With many traders and speculators eager to deposit their money under the Greenback. And get a yield return in the process. It reveals some of Traders believe that the US CPI report will cause the recent disinflationary process to stagnate or perhaps reverse, resulting in a spike in inflation.
The economic calendar is thus getting up momentum. With the key US CPI announcement on Thursday. Add in the weekly Jobless Claims report, and markets are bound to be volatile. The Federal Open Market Committee (FOMC) Minutes of the September meeting were released on Wednesday. Revealing that a substantial majority of Federal Reserve (Fed) voters supported a larger 50 basis point (bps) rate decrease. While a smaller number voted for a more gradual approach.
Daily Market movers: Rate differential kicks in again.US Dollar Index is trading above 102.50 and flirting with a break above 103.00.
US Treasury rates are surging Traders believe that the US CPI report will cause. The recent disinflationary process to stagnate or perhaps reverse, resulting in a spike in inflation.
The economic calendar is thus getting up momentum, with the key US CPI announcement on Thursday. Add in the weekly Jobless Claims report. And markets are bound to be volatile. Moreover The Federal Open Market Committee (FOMC) Minutes of the September meeting were released on Wednesday, revealing that a substantial majority of Federal Reserve (Fed) voters supported a larger 50 basis point (bps) rate decrease, while a smaller number voted for a more gradual approach. are surpassing other sovereign rates, resulting in a widening of rate differentials between the United States and several other countries. This contributes to a stronger US Dollar overall.
At 12:30 GMT, a bulk load of data points will be released:
US Consumer Price Index data for September:
Monthly core inflation is predicted to rise by 0.2%, vs 0.3% in August.
Moteover In keeping with the core data, monthly headline inflation is predicted to rise 0.1% from 0.2% in August.
Yearly core inflation is predicted to remain at 3.2%, but headline inflation is expected to fall to 2.3%, down from 2.5% in August.
Moreover Initial Jobless Claims for the week ending October 4 are predicted to rise to 230,000 from 225,000 the previous week. The next Fed meeting on November 7 is expected to decrease interest rates by 25 basis points, while 19.9% expect no rate cut. Chances of a 50 basis point rate drop have already been totally priced out.
The US 10-year benchmark rate is at 4.08%, its highest level since early August.
