What you need to know on Wednesday, October 13:
Market participants kept struggling for a catalyst as the macroeconomic calendar remained scarce. Overall, risk-aversion dominates the scene amid Chinese headwinds related to financial stability and the ongoing energy crisis.
Furthermore, the International Monetary Fund lowered its global growth forecast amid "seeing major supply disruptions around the world that are also feeding inflationary pressures, which are quite high and financial risk taking also is increasing, which poses an additional risk to the outlook."
The American dollar gathered momentum during US trading hours, helped by comments from US Federal Reserve officials aligned with soon-to-come tapering. Vice-Chair Richard Clarida said, "I myself believe that the 'substantial further progress' standard has more than been met with regard to our price-stability mandate and has all but been met with regard to our employment mandate," adding that gradual tapering of assets purchases could conclude mid-2022.
Federal Reserve Raphael Bostic noted that inflation is well above Fed's 2% goal, noting that persistent supply chain issues will probably last longer than initially anticipated. Hence, policymakers need to watch carefully to ensure that pandemic-induced pressures do not cause long-term inflation expectations to become unanchored.
Across the pond, dismal German data undermined demand for the shared currency. The EUR/USD pair fell to a fresh 2021 low of 1.1524, holding nearby as the day ended.
The GBP/USD pair hovers around 1.3590, undermined by the dollar's demand, and despite speculation the Bank of England could raise interest rates before year-end to counter inflationary pressures.
The AUD/USD pair held on to gains near 0.7350, although the sour tone of equities prevented it from advancing further. USD/CAD fell to 1.2433, a fresh 2-month low as crude oil prices held at multi-year highs. WTI settled at $80.60 a barrel.
Gold attempted to rally but changed course in the US afternoon, ending the day with modest gains around $1,760 a troy ounce.
Solana bound for further losses as SOL eyes $125
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