Forex Today: Currencies maintain calm ahead of US CPI

Matías Salord FXStreet

The key event of the day will be the US CPI report for July. During the Asian session, wholesale inflation data is due in Japan, and in Australia, the Melbourne Institute Inflation Expectations report.

Here is what you need to know on Thursday, August 10:

Thursday is the key day in a relatively quiet week in terms of economic data, with the focus on US inflation data. The Consumer Price Index (CPI) is expected to show a rebound in the annual rate from 3% to 3.3%, while the Core rate is anticipated to remain at 4.8%. The weekly Jobless Claims report will also be relevant.

US CPI Preview: Forecasts from 10 major banks, monthly pace should hold at 0.2%

The inflation figures in the US are likely to trigger volatility, and market participants are eagerly awaiting the data. Prior to the report, the US Dollar posted mixed results on Wednesday, maintaining relative strength overall.

US stocks experienced a decline, with the Nasdaq falling 1.17% and the Dow Jones losing 0.54%. Crude oil prices, on the other hand, rose to fresh multi-month highs, with the WTI barrel climbing 1.60% and breaking above $84.00.

The US 10-year Treasury auction received decent demand. Its yield fell modestly to 4.01%, while the 2-year rebounded to 4.80%.

In a quiet session for currencies, the US Dollar Index experienced a marginal decline, consolidating around 102.50 as market participants await US inflation data.

EUR/USD modestly rose to 1.0970 as the Euro outperformed following the Italian government's decision to water down its windfall tax on banks by implementing caps on payouts. The European Central Bank (ECB) will release its Economic Bulletin, and Italy will report the final reading of July inflation.

USD/CHF rose for the second consecutive day but remains below 0.88000. EUR/CHF rebounded from 0.9580 to 0.9630 on Wednesday after the clarification regarding Italy's new windfall tax on banks.

GBP/USD remains range-bound around 1.2750. On Friday, the UK will report GDP and Industrial Production data.

USD/CAD marginally rose, closing slightly above 1.3420 but still far from its highs.

Analysts at Commerzbank on the Loonie:

The Bank of Canada surprisingly ended its interest rate pause at the beginning of June. It has since raised the key interest rate in two steps to 5%. Market expectations that it would raise rates further by the end of the year crumbled recently, which weighed on the CAD at the beginning of August, as did global factors. However, we maintain our outlook and see moderate CAD recovery potential in the medium term.

AUD/USD traded within Tuesday's range, remaining stagnant near 0.6540. The bias continues to favor the downside, influenced by cautious market sentiment and declining commodity prices. On Thursday, the Melbourne Institute is set to release the inflation expectations report.

NZD/USD recorded its lowest daily close in two months around 0.6050 but managed to hold above the key support level of 0.6030.

Gold prices continued to decline, marking the third consecutive day of losses and recording the lowest daily close in a month at $1,914. Similarly, Silver also lost ground, falling to $22.65. Precious metals remain under pressure, struggling to initiate a sustainable recovery and showing no signs of a correction.

Like this article? Help us with some feedback by answering this survey:

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

GBP/USD climbs to four-day highs near 1.3250

GBP/USD rapidly reverses Friday’s small losses and challenges the 1.3250 level, or four-day tops, at the beginning of the week. Cable’s upside comes on the back of further loss of momentum in the Greenback, while traders continue to assess the geopolitical front and upcoming key events.

EUR/USD extends the advance past 1.1400

EUR/USD starts the week on a positive note, trading above 1.1400 on Monday as broad-based US Dollar weakness lends support to the pair. In the meantime, investors continue to monitor developments surrounding efforts to end the US-Iran conflict, while attention gradually shifts to the ECB's annual forum and the US NFP data.

Gold falters just ahead of $4,100

Gold remains under modest bearish pressure just above the key $4,000 mark per troy ounce on Monday. The yellow metal struggles to extend its recent gains as renewed effervescence in the Middle East revives inflation concerns and bolsters Fed rate hike expectations.

Bitcoin four-year cycle: BTC risks 75% drawdown with four months of bear market still ahead

Bitcoin price continues to trend downward below the $60,000 support zone after losing over 50% of its value since the $126,199 high in October. Bitcoin’s four-year cycle, measured from cycle tops to bottoms, suggests that four months of a bear market are still ahead.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.