European markets are under heavy pressure again today, but in the US the dollar rally is still going strong, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
FTSE 100 edges down but rest of Europe drops sharply
The rise in yields continues to pressure European stocks, but the FTSE 100’s losses pale in comparison to continental Europe. Here, the yield trade combines with political worries about the German election, plus deep concern that incoming president Trump will impose tariffs on European companies. The CAC40 is heading back to the lows of August but the Dax is losing ground rapidly too.
Dollar pushes to five-month high
Today’s CPI reading has supported the dollar and given it fresh impetus to move higher, while a drop to parity for the euro against the dollar is being openly talked about once more. Trump’s election has only increased the appeal of all things US, and while stocks have taken something of a breather this week, there seems no stopping the dollar.
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EUR/USD continues to grind out further losses
EUR/USD continued to drift into the basement on Wednesday, clipping into a 54-week low and settling within touch range of 1.0550. Fiber continues to shed weight on the charts as broader FX markets pivot full-bore into holding the Greenback.
GBP/USD sheds weight for a fourth straight day on Wednesday
GBP/USD eased further into the low end on Wednesday, trimming further south of the 200-day Exponential Moving Average in a one-sided bearish decline as the pair closes in the red for a fourth consecutive trading day.
Gold extends slide to fresh two-month low
After shedding some ground throughout the first half of the day, the US Dollar is back in fashion. XAU/USD trades at its lowest in two months in the $2,580 region and is technically poised to extend its slump.
Australia unemployment rate expected to remain steady for third straight month in October
The Australian Unemployment Rate is foreseen stable at 4.1% in October. Employment Change is expected at 25K, much lower than the 51.6K posted in September. AUD/USD is under pressure and may soon pierce the 0.6500 mark.
Trump vs CPI
US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis.
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