The US dollar gained momentum following yesterday's data on inflation and initial jobless claims. It jumped considerably immediately after the release of both reports. Interestingly, yesterday, we discussed whether it is worth selling the US dollar. As it turned out, our forecast turned out to be true and the greenback did not slump. We have already analyzed the current market situation. So, we are ready to share our forecast with you!
US consumer prices rose in October at the fastest annual pace since 1990. Traders believe that the Fed may raise the key rate earlier than the central banks of Europe and Japan. Other regulators are also considering a similar measure. Now, investors are anticipating the US dollar’s increase above 95. It has already reached 95. Yet, analysts expect a correction. After that, the US dollar index may consolidate at 94.80 for a while.
The yen recovered from its sharpest monthly drop as US inflation data boosted expectations of a key rate hike. We predicted an increase in the dollar/yen pair. Yet, its rise exceeded our expectations. The pair is currently trading at 114. It may climb to 114.20 and roll back a little because its growth was too quick.
The Australian dollar is weakening against the US currency. The AUD/USD pair has already dropped to 0.7300. As we said yesterday, the pair may decline to 0.7280. After that, it may enter the correctional phase.
Let’s sum up. The US dollar soared following data on a record increase in the US inflation rate. Annual inflation in October jumped to the highest level since 1990. It surged to 6.2% after the September figure of 5.4%. Analysts had expected the reading to total 5.8%. So, they suppose that the Fed may raise the benchmark rate by the end of next summer from the current level of 0-0.25%. Besides, the regulator may hike the key rate more than once over time, which is bullish for the US dollar.
That’s all for now! Please note that today, there will be no video review of the US session as trading floors in the US are closed for a holiday. See you tomorrow!
00:00 Intro
00:36 USDX
01:11 USD/JPY
01:37 AUD/USD


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