Yesterday's US inflation figures provided little new information, with all figures coming in as expected: The headline rate rose by 0.2% and the core rate by 0.3% month-on-month, Commerzbank’s FX analysts Michael Pfister notes.

USD honeymoon period is not expected to last forever

“The US Dollar (USD) weakened slightly after the release, as the core rate was closer to the rounding limit of 0.2%, but the move was hardly worth mentioning. In the short term, the figures are unlikely to dissuade the Fed from cutting rates again in December. For that to happen, the figures would have to surprise on the upside; after all, policymakers believe that monetary policy is still far too restrictive.”

“On the other hand, the figures were unlikely to necessitate a major rate cut of 50 basis points. In short, the figures provided little news for monetary policy in the coming months. Political factors are more important for the US Dollar at the moment. Yesterday afternoon, the USD continued to make gains. It was difficult to identify a clear reason for this, but it is possible that Trump's announcements that he will choose hardliners for many of the positions is causing further euphoria.”

“This would also make other election announcements more likely, which would lead to higher inflation in the medium term. At the moment, the market is only focusing on the USD-positive factors of these election promises and ignoring the potential problems. However, this honeymoon period should not be expected to last forever.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

Australian Dollar appreciates despite stronger US Dollar, PMI awaited

Australian Dollar appreciates despite stronger US Dollar, PMI awaited

The Australian Dollar (AUD) continues to strengthen against the US Dollar (USD) following the release of mixed Judo Bank Purchasing Managers' Index (PMI) data from Australia on Friday. The AUD also benefits from a hawkish outlook by the Reserve Bank of Australia (RBA) regarding future interest rate decisions. 

AUD/USD News
Japanese Yen remains on the front foot against USD, bulls seem non-committed

Japanese Yen remains on the front foot against USD, bulls seem non-committed

The Japanese Yen (JPY) attracts some buyers for the second straight day on Friday amid reviving bets for more interest rate hikes by the Bank of Japan (BoJ), though it lacks any follow-through.

USD/JPY News
Gold advances to near two-week high, eyes $2,700 on geopolitical tensions

Gold advances to near two-week high, eyes $2,700 on geopolitical tensions

Gold price (XAU/USD) prolongs its uptrend for the fifth consecutive day on Friday and climbs to a nearly two-week top, around the $2,690-2,691 area during the Asian session. Intensifying Russia-Ukraine tensions force investors to take refuge in traditional safe-haven assets and turn out to be a key factor underpinning the precious metal.

Gold News
Ethereum Price Forecast: ETH open interest surge to all-time high after recent price rally

Ethereum Price Forecast: ETH open interest surge to all-time high after recent price rally

Ethereum (ETH) is trading near $3,350, experiencing an 10% increase on Thursday. This price surge is attributed to strong bullish sentiment among derivatives traders, driving its open interest above $20 billion for the first time. 

Read more
A new horizon: The economic outlook in a new leadership and policy era

A new horizon: The economic outlook in a new leadership and policy era

The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.

Read more
Best Forex Brokers with Low Spreads

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.

Read More

Forex MAJORS

Cryptocurrencies

Signatures