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Forex Today: US Inflation Drops, Sparking Risk Rally

By Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

US inflation shows no increase month-on-month and drops to an annualized rate of 8.5%

  • US CPI data released yesterday showed that inflation has slowed to zero month-on-month, and that the annualized rate has fallen from 9.1% to 8.5%. This will give hope to those analysts believing that US inflation has peaked and will reduce some of the pressure on the Fed to be more hawkish. Although most analysts still expect the Fed to hike rates by 0.75% at its next meeting (backed by public comments from two Fed members), the CPI data has boosted risky assets and sparked a selloff in the US Dollar.
  • The S&P 500 Index and the NASDAQ 100 Index both rose firmly yesterday to trade at new 3-month highs.
  • In the Forex market, the US Dollar is the weakest major currency, while the New Zealand, Australian, and Canadian Dollars are the strongest. At the time of writing, there was a short-term retracement against this movement, but it is likely to resume when London or New York open.

  • BTC/USD is rising within a bullish price channel and is very close to making a near 2-month high price.
  • There will be a release of US PPI data today.
  • Daily new coronavirus cases globally dropped last week for the third consecutive week, reversing the earlier trend of an increasing number of confirmed cases.
  • It is estimated that 67.2% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 7.5% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.  
  • Total confirmed new coronavirus cases worldwide stand at over 592.4 million with an average case fatality rate of 1.09%.  
  • The rate of new coronavirus infections appears to now be most significantly increasing in Barbados, Chile, Finland, Japan, South Korea, Mongolia, Trinidad, Vietnam, and Serbia.  
Adam Lemon
About Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

 

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