Fed Chair Jerome Powell’s comments on the Jackson Hole Symposium resulted in the worst weekly candle in US500 since June.
Can Core PCE Influence USD?
What will happen?
The US Bureau of Economic Analysis will publish Core Personal Consumption Expenditures (PCE) on March 31, at 15:30 MT. This monthly release comes out 30 days after the month ends. The PCE indicator differs from the core CPI as it measures only goods and services consumed by individuals. Prices are weighted according to the total cost of a product. It provides essential information about consumer behavior.
How will USD react?
Inflation in the US keeps increasing due to geopolitical news. Moreover, logistical problems caused by the boycott of Russian goods and resources accelerate the US market prices’ rise. As a result, the Federal Reserve has to consider faster rate hikes. Expectations of such policy push the USD up. The US dollar index is trading near the highest levels since May 2020.
On February 25, PCE rose by 0.5%, the same as predicted. However, the release was overshadowed by the beginning of the Russian-Ukrainian conflict. Due to this fact, the currency fluctuations weren’t significant.
How to trade on the US core PCE release?
As the PCE index is crucial, it is likely influence gold and the USD pairs. Gold is considered as a hedge against inflation, but PCE high numbers increase the chance of rate hikes. Thus, the metal may fall against the USD.
- If the actual numbers beat expectations, then the USD will go up, and gold (XAUUSD) will fall.
- On the contrary, lower numbers will make gold rise.
Check the Economic Calendar.
Instruments to trade: XAUUSD, EURUSD, USDCAD, USDCHF.
Last week several important economic updates influenced the Forex market. US preliminary GDP fell less than expected (0.6% actual vs. 0.7% forecast). Below you will find the key events to trade on during the week from August 29 to September 2.
The United States will publish the Inflation Rate and Core Inflation Rate, also known as US CPI and Core CPI, on August 10 at 15:30 GMT+3.
As Europe moves into recession, next week may provide us with some amazing trading opportunities. Here they are!
Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index
The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.