Inflation in the US, as measured by the change in Personal Consumption Expenditures (PCE) Price Index, declined to 2.4% on a yearly basis in January, the US Bureau of Economic Analysis reported on Thursday.
EUR/USD has found fresh demand and marches toward 1.0650 in European trading on Wednesday. The pair capitalizes on renewed US Dollar retreat but the further upside appears capped amid Germany's political instability and a cautiou market mood. Traders await US CPI data and Fedspeak for fresh directives.
GBP/USD is struggling at around 1.2750 in the European session on Wednesday, unable to find any fresh impetus. Traders turn risk-averse and refrain from placing fresh bets on the pair ahead of the critical US CPI data and speeches from several Fed policymakers.
The "Trump trade" is back in full force, shaking up global markets in the aftermath of the November 5th U.S. election. This resurgence has led to substantial shifts in both currency and bond markets, with the U.S. dollar index (DXY) jumping 2.0% + since election day.
Gold price staged a modest recovery from a nearly two-month low touched on Tuesday. Elevated US bond yields and bullish USD cap gains for the non-yielding XAU/USD. Traders now look forward to the key US Consumer Price Index report a fresh impetus.
As measured by the CPI, inflation in the US is expected to increase at an annual rate of 2.6% in October, a tad higher than the 2.4% growth reported in September. The core annual CPI inflation, excluding volatile food and energy prices, will likely remain at 3.3% in the same period.
