Forex Today: Inflation spooks markets, dollar stabilizes, cryptos pressured, Fed officials eyed

Here is what you need to know on Tuesday, May 11:

The market mood has soured as investors focus on inflation fears rather than signs of cooling down. The dollar is off the lows ahead of the US JOLTs figures and speeches from Fed officials. Cryptocurrencies are on the back foot. 

China reported an increase of 6.8% in the annual Producer Price Index (PPI), higher than expected. Rises in commodity prices have been attributed to the leap, the highest since October 2017. On the other hand, the Consumer Price Index (CPI) remained tame due to increases in pork prices recorded in 2020.

Concerns of rising inflation have been spooking markets, weighing especially on US tech stocks. These fears replaced the calm following the downbeat Nonfarm Payrolls figures, which showed the US economy is not overheating. Tensions around mounting ahead of April's CPI figures due out on Wednesday. 

US Consumer Price Index April Preview: The two base effects on inflation

The risk-off mood helped the dollar stabilize, with EUR/USD hovering around 1.2150, GBP/USD above 1.41, and AUD/USD above 0.78. The greenback lost substantial ground on Monday. The US releases its JOLTs job openings report for March later in the day, potentially showing a leap in vacancies. 

The German ZEW Economic Sentiment is projected to show an increase in business confidence as Europe advances with its vaccination campaign. UK Prime Minister Boris Johnson announced additional loosening of measures from Monday. 

Federal Reserve officials, including John Williams, Lael Brainard, Mary Daly and Raphael Bostic are set to speak later in the day. They will likely repeat the bank's message that inflation is temporary. 

Pipeline: Gasoline supplies to the US East Coast are still strained due to a ransomware attack on Colonial Pipeline. The firm is working to resume normal activity by the end of the week, recovering from a more potentially originating from Russia. 

Virus: The US Food & Drug Administration (FDA) approved the use of the Pfizer/BioNTech vaccine to adolescents aged 12 to 15. Reaching children would help in achieving herd immunity.

Cryptocurrencies have been consolidating their losses after correcting lower from their highs on Monday. Bitcoin is changing hands at around $55,000, Ethereum is below $4,000, XRP under $1.50 while Dogecoin stands out by moving higher. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD rebounds, steadies above 1.0400

EUR/USD rebounds, steadies above 1.0400

EUR/USD has staged a rebound and reclaimed 1.0400 during the American trading hours on Friday with the US Dollar Index retreating from the multi-week high it set at above 105.60. Nevertheless, the pair remains on track to close the week in negative territory. 


GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD reversed its direction and advanced to the 1.2050 area after having dropped to 1.1976 earlier in the day. The pair is still down more than 1% on the day with safe-haven flows dominating the financial markets following the disappointing PMI data from the US.


Gold rebounds above $1,800 as US yields fall sharply

Gold rebounds above $1,800 as US yields fall sharply

Gold has regained its traction and recovered above $1,800 after having slumped to a multi-month low below $1,790. Following the dismal PMI data from the US, the benchmark 10-year US Treasury bond yield is down more than 6% on the day, fueling XAU/USD's rebound.

Gold News

Why traders are rushing to exit positions on Cardano’s ADA price

Why traders are rushing to exit positions on Cardano’s ADA price

Cardano (ADA) price has had its performance review as the summer kicks off. ADA bulls are returning home with not-that-good a scorecard, and the underperformance could cut short holiday funding for the cryptocurrency.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!