All eyes on U.S. CPI and the direction of the U.S. dollar
12.05.2021
- U.S. Consumer Price Index
- The euro-dollar exchange rate is falling
Yesterday, both European and U.S. stock markets fell, leading to a scenario of falling stock prices, a weaker U.S. dollar, and rising interest rates. As stock prices declined, the fear index (VIX) rose above 20 to 21.8, and crude oil prices also climbed back up to $65.4. Gold traded within a range of $1,817 to $1,845.
In the foreign exchange market, the euro-dollar pair has fallen from yesterday’s U.S. trading session through today’s Asian session, settling around 1.211. However, since the daily chart indicates an uptrend, we should proceed with caution while gauging the direction of the U.S. dollar. Today’s U.S. CPI is expected to come in at 0.2%, and depending on whether the actual result matches the forecast, this could provide some direction for the U.S. dollar.
Today, at 3:00 PM CET, the UK will release its Q1 GDP (flash estimate), industrial production, and trade balance; at 3:45 PM CET, France will release its consumer price index (final);at 18:00, the Eurozone Industrial Production and remarks by Bank of England Governor Bailey; at 20:00, the U.S. MBA Mortgage Applications Index; at 21:30 U.S. time, the U.S. Consumer Price Index; at 22:00, remarks by Fed Vice Chair Clarida; and at 22:05, remarks by U.S. Federal Reserve’s Rosengren:Boston Fed President, 11:30 PM US Weekly Crude Oil Inventories, and 2:00 AM US 10-Year Treasury Auction. We will be closely monitoring whether today’s US CPI release brings about any shifts in the balance of power.
Author: Keisuke Sakurai
