The Fed made a hawkish surprise! The bank would start a discussion about scaling back bond purchases. Besides, it is likely to make two interest-rate increases by the end of 2023 (sooner than expected)!
Will the US CPI boost the USD?
The American CPI is announced on Wednesday at 15:30 MT time.
Instruments to trade: EUR/USD, GBP/USD, AUD/USD, USD/CAD
Consumer prices are the indicator and the main component of country inflation. Inflation, above all, is the indicator of economic activity. More consumer demand – higher prices, lower consumer demand – lower prices. Consumer demand, in turn, is the basis of domestic economic health and prosperity. Therefore, if the US CPI is higher than the forecasts, that would mean that the US economy is recovering faster than projected. Such a scenario would boost the USD.
- If the CPI is better than though, the USD will rise.
- Otherwise, it will drop.
The Federal Reserve will release its statement and announce its interest rate decision at 21:00 MT time. Then, at 21:30 MT time, the central bank will hold a press conference.
Bitcoin has broken above $41,000 for the first time since late May. Follow US Retail Sales at 15:30 MT time!
The Bank of England will release its statement and announce its monetary policy decision at 14:00 MT.
Last week the USD soared versus other major currencies, while gold headed for the biggest weekly loss in 15 months. Let’s see what new moves await us this week!
The US dollar has surged to levels unseen since April after the Fed's decision back on Wednesday. Gold has reversed up from the local dips. Still, this week was the worst for gold in more than a year.