The US dollar is heading to close the seventh day in the red as it remains under selling pressure. The US data at 15:30 GMT+3 (jobless claims and Philly Fed Manufacturing Index) may support the greenback if it's strong.
How Will USD react to Core PCE Price Index?
What will happen?
Core PCE Price Index will be announced at 15:30 MT (GMT+3) on Friday, October 1.
The index is different from Core CPI as it only measures goods and services targeted towards and consumed by individuals. Prices are weighted according to total expenditure per item which gives important insights into consumer spending behavior. This is rumored to be the Federal Reserve's favorite inflation measure.
Last time the result met the expectations, but GBP/USD rose, as the result was lower than the previous one.
How to trade on Core PCE Price Index?
- If the Core PCE Price Index is greater than forecast, the USD is likely to strengthen against other currencies.
- If the Core PCE Price Index is lower than forecast, the USD is likely to weaken against other currencies.
Instruments to trade: USD/CAD, USD/CHF, GBP/USD
The United States will release the weekly Unemployment Claims on October 21, at 15:30 MT time (GMT+3).
The Fed is ready to start tapering in November. Since the markets were expecting this and it wasn’t a surprise, the USD slumped allowing risk-on currencies and gold to rally up.
S&P 500 and Nasdaq are still near all-time highs, supported by robust corporate earnings. Gold keeps moving inside the ascending channel.
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