Economics week ahead

Wells Fargo Research Team Wells Fargo

Next week, we expect the FOMC to raise rates by 25 bps, bringing the federal funds rate target range to 3.75%–4.00%. Consumer spending should remain resilient, with retail sales rebounding 0.7% in August. Meanwhile, elevated mortgage rates and affordability challenges are likely to keep housing starts under pressure in August.

Abroad, central banks remain in focus. We expect the Bank of Japan to hike rates by 25 bps, while the Bank of England likely stays on hold but maintains a hawkish tone. In emerging markets, we expect India's CPI is expected to rise to 4.75% year-over-year, a bit softer than consensus, while cooler-than-expected inflation in Brazil should support another 25 bps rate cut to 13.75%.

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Wells Fargo Research Team

Wells Fargo

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold: Gains remain capped by $4,400

Gold regains composure and trades with decent gains on Friday, managing to refocus attention on the $4,440 mark per ounce troy. Therefore, the precious metal reverses Thursday’s decline as the US Dollar alternates gains with losses at the end of the week.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook

Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.

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Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.