- The US dollar was hammered during the trading session on Thursday as I continue to look at this pair during my daily USD/CNH analysis.
- This is a market that has quite a bit of information attached to it, due to the fact that this can give us an idea as to how the global economy is moving in general.
- As a general rule, when the US dollar takes off to the upside, and that generally means that we are more or less in a “risk off” type of attitude.
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CPI Misses the Mark
The Consumer Price Index numbers coming out the United States lower than anticipated and of course is a very significant turn of events, due to the fact that most traders around the world have been waiting to see what’s going on with US inflation. After all, as the United States has seen so much inflation, the Federal Reserve of course has kept monetary policy very tight over the course of the last several months. This of course has kept the United States dollar strong, as the interest rate differential with other currencies of course continues to favor the greenback.
That has not changed during the day, and it’ll be interesting to see how things play out due to the fact that the Producers Price Index comes out on Friday, and it’s possible that it could give us a completely different read. Whether or not that’s the case remains to be seen, but we have seen that happened several times recently, where the CPI would have the market moving in one direction, only to see the PPI a market come in and turn things completely around.
The size of the candlestick is impressive, but it’s also worth noting that we have already started to bounce a bit, so I think this will be interesting to pay close attention to. There was a little bit of a relief rally, and of course it’s also worth noting that the Bank of Japan has intervened in the market, so who knows what kind of “knock on chaos” they created.
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