Forex trading cautiously outperforms U.S. CPI

On Thursday, the pair was trading higher against all but all major currencies. The Federal Reserve is meeting, and many expect a quicker rejection of the adjustment policy. Today confirms that the labor market is ablaze with heat. The number of new jobless claims fell to 185,000 last week, the lowest level since 1969. Read again – 1969. This is a 52-year low. Weekly demands can be very volatile, but there is an irrefutable downtrend that reflects labor market pressures. Employers are reluctant to fire workers when there is a shortage of willing applicants, which can become a problem for wage growth.

Inflation data for the US is due tomorrow, and economists expect growth to slow and accelerate on a yearly basis. Given the recent comment by Federal Reserve Chairman Jerome Powell that it is time to remove the word “temporary” from the central bank’s inflation description, prices will rise at the fastest pace in 30 years, with the likelihood of a monthly CPI rising. Gas prices were high throughout November, with many Americans reporting an increase in the cost of Thanksgiving dinner. Traders are cautiously buying dollars and selling stocks ahead of Friday’s CPI report. If inflation turns out to be higher than expected, rates on rate hikes will increase, pushing the US dollar higher against the US dollar, while lowering stocks.

All three commodity currencies were trading lower. The Canadian dollar continued its decline after the Bank of Canada announced a recent decline in gasoline prices. The Bank of Canada expects that it will remain elevated next year, and in the second half of the year will decline to about 2%. The rising dollar also declined, putting pressure on the Canadian dollar. The Chinese drove softer and the dollars are lower. New Zealand will be the focus of the NZD tonight.

The rising US dollar also dipped below 1.1300. While a smaller amount for Germany may have contributed to this move, the real concern is that eurozone countries will follow the UK in imposing new restrictions. The daily number of cases in the UK is at its highest since January. In the same month, the number of new cases reached a record 68,000. The incidence in Germany hit a record high this month, and yesterday recorded the highest number of COVID deaths since February. In anticipation of the Christmas holidays, the number of calls is increasing due to restrictions.

Tomorrow’s report is not expected to have a significant impact on the euro. The pound sterling, on the other hand, could be impacted by monthly GDP and industrial production, which are expected to be stronger. The Bank of England and investors will be keen to find out if Omicron has influenced its plans to remove incentives.

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