Only a strong US CPI report will prevent the US Dollar from falling to fresh lows – MUFG

FXStreet Insights Team FXStreet

The US Dollar has continued to weaken at the start of this week. Only a stronger-than-expected US Consumer Price Index (CPI) on Thursday would avoid a slide to fresh lows, economists at MUFG Bank report.

ISM survey heightens US recession risks ahead of US CPI report

“The main trigger for the renewed USD sell-off was the release of the much weaker than expected ISM services survey on Friday that signalled a heightened risk of recession in the US. The scale of weakness signalled by the report has encouraged market participants to scale back expectations for further Fed rate hikes.”

“The combination of heightened US recession fears and falling US yields supports our outlook for the US Dollar to weaken further in the year ahead.”

“Market attention in the week ahead will now quickly switch to the release of the latest US CPI report on Thursday. The risk of a stronger US CPI report could be the only factor that prevents the US Dollar from falling to fresh lows in the week ahead.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD stabilizes near 1.3200 following latest rebound

GBP/USD holds steady at around 1.3200 in the European session on Friday after closing in positive territory on Thursday. Still, the cautious market mood makes it difficult for the pair to gather bullish momentum as investors remain focused on US-Iran conflict and the volaility surrounding global technology shares.

EUR/USD rebounds to 1.1400 as USD corrects lower

EUR/USD gains traction in the European session on Friday and rises to the 1.1400 area. The US Dollar (USD) struggles to find demand and helps the pair edge higher as investors keep a close eye on headlines coming out of the Middle East and the action in global technology stocks.

Gold holds above $4,000 but Fed hike bets cap the upside

Gold moves sideways in a tight channel above $4,000 after posting modest gains on Thursday. Nevertheless, the precious metal finds it difficult to gather bullish momentum as markets grow increasingly concerned about a hawkish Federal Reserve policy outlook.

Ripple price clings to $1 as long liquidations deepen bearish trend

Ripple (XRP) trades near the key psychological support level of $1 after losing more than 8% so far this week. CoinGlass liquidation data shows that over 97% XRP long positions were wiped out over the past 24 hours. In addition, derivatives metrics continue to favor the bears.

Asian stock markets plummet as Apple price hike raises inflation concerns, KOSPI dives over 8%

Asian equity markets on Friday are significantly down as price hikes announced by Apple Inc. due to memory chip shortages have prompted fears of high inflation globally and concerns on earning projections of various companies that rely on these sophisticated chips for their final products.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.