US: Core PCE inflation to peak at 2.4% in April – Goldman Sachs

Dhwani Mehta FXStreet

The Goldman Sachs analysts believe that the US inflation is likely to edge higher in the coming months before subsiding by the year-end.

Key quotes

Forecast “core PCE inflation to peak at 2.4% in April and then by year-end back to 2.0%, bolstered by the year-on-year comparison to the April 2020 lockdowns.”

“In our baseline, a partial rebound in four particularly sensitive categories-air and ground transportation, hotels, and recreation admissions-will contribute nearly +0.5pp.”

“But how high could core inflation go if mass vaccination unleashes surging demand in virus-sensitive categories?”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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.