While the Nasdaq 100 is surging again today, the euro is in retreat ahead of tomorrow’s expected ECB rate cut, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
Stocks rally following US inflation data
Risk sentiment had been kept in check ahead of the inflation print today, but the news has unleashed fresh buying. Technically the ‘Santa Rally’ doesn’t usually start for a few more days, but the Nasdaq 100 has got its gains in early, surging to a new record high. Interestingly, we have seen the dollar push higher too even though today’s figures are unlikely to mean the Fed will swerve from a rate cut next week. But looser rates should mean stronger economic growth, reinforcing the desire of investors to keep investing in the US.
Canada cuts rates, ECB’s turn next?
The euro is dropping against the dollar and sterling ahead of the ECB’s decision tomorrow. It will be the second bank to do so in 24 hours, following Canada’s lead this afternoon. While both the ECB and the Fed are in easing mode, they are conducting this policy for very different reasons – for the ECB, it’s a question of doing what it can to prop up an ailing economy whereas the Fed can enjoy gently easing policy to support more solid growth.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Recommended Content
Editors’ Picks
EUR/USD drops below 1.0500 after US inflation data
EUR/USD stays under pressure and trades below 1.0500 in the American session on Wednesday. The US Dollar stays resilient against its rivals after the data showed that the annual CPI inflation edged higher to 2.7% in November, not allowing the pair to stage a rebound.
Gold extends rally above $2,700
Gold preserves its bullish momentum and trades above $2,700 for the first time in two weeks. Investors fully price in a 25 basis points Fed rate cut in December following the November inflation data from the US, boosting XAU/USD.
BTC faces setback from Microsoft’s rejection
Bitcoin price hovers around $98,400 on Wednesday after declining 4.47% since Monday. Microsoft shareholders rejected the proposal to add Bitcoin to the company’s balance sheet on Tuesday.
Why is the ECB set to cut interest rates again and what does that mean Premium
The ECB is widely expected to cut interest rates on Thursday for the fourth time this year. This is a significant achievement as it suggests that the ECB, which sets monetary policy in the Eurozone, is accelerating its path towards lower interest rates after an unprecedented increase.
GBP/USD drops below 1.2750, awaits US inflation data
GBP/USD is back in the red below 1.2750 in European trading on Wednesday. The Pound Sterling loses traction amid renewed US Dollar buying as risk sentiment worsens heading into the key US CPI showdown. The US inflation data is key to gauging the pace of Fed's future rate cuts.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.