Risk assets only partially reflect the better recent news on US inflation – Goldman Sachs

Anil Panchal FXStreet

Goldman Sachs (GS) recently came out with its take on the recently easing inflation signals from the United States.

The investment bank initially said, “Price inflation is slowing sharply,” before stating that over the past two months, sequential core PCE (Personal Consumption Expenditure) inflation has averaged 2.6% at an annual rate – half the pace of the prior year.

“If wage growth and core inflation continue to come down, Fed officials will become gradually more tolerant of easier conditions,” adds GS.

Goldman Sachs also mentioned that core PCE inflation should drop under 3% this year while also adding, “Falling shelter inflation will help.”

Also read: US 5-year, 10-year inflation expectations probe Fed policy doves

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.