Analyzing the Forex market for the week of November 4-10, 2024, we focus on pivotal events impacting high-impact currencies. Key insights include the US Presidential Election’s implications on the USD and central bank decisions affecting the GBP and AUD. Stay tuned for the upcoming economic calendar that promises significant market movement.
The recent economic data for the United States has been disappointing, leading investors to reconsider the necessity of another interest rate increase by the Federal Reserve before the contractionary phase concludes, potentially followed by more rate cuts next year. Consequently, the US dollar has shown signs of weakness in the financial markets.
As it is known, market participants do not only expect interest rates to increase but also to decrease it. But it should be noted that if the stickiness of inflation is high, the Federal Reserve will probably increase the interest rate again, and because the market has predicted a decrease in the interest rate, this issue can put heavy pressure on stocks and indices. be risk-averse. Of course, this analysis is based on the assumption that the US labor market is strong and the unemployment rate is low. If the unemployment rate increases, the Federal Reserve will have to adopt an expansionary policy, and Congress will urgently increase the debt ceiling of the US government.
As it is known, market participants do not only expect interest rates to increase but also to decrease it. But it should be noted that if the stickiness of inflation is high, the Federal Reserve will probably increase the interest rate again, and because the market has predicted a decrease in the interest rate, this issue can put heavy pressure on stocks and indices. be risk-averse. Of course, this analysis is based on the assumption that the US labor market is strong and the unemployment rate is low. If the unemployment rate increases, the Federal Reserve will have to adopt an expansionary policy, and Congress will urgently increase the debt ceiling of the US government.
🇺🇸 For the US dollar, the CPI index for April, due out on Wednesday, will be on everyone’s radar. The core CPI data is expected to change from 5.0% to 5.2% year-on-year, while the core CPI rate is expected to be unchanged at 5.6% year-on-year, indicating that the increase in the cost of factory goods accelerated during the month.
Last week, US manufacturing and service sector PMIs were released in their preliminary assessment of April.
The data showed that the average price of goods and services rose in April from September last year, and the inflation rate has now risen for three consecutive months.
The US non-farm payrolls printed 236,000 jobs in March, above the 230k consensus and the unemployment rate dropped to 3.5%.
This week’s core inflation number is likely to come in at 0.4%.
So we have More jobs, less unemployment, and high inflation.
This could be Powell’s only reason for further rate hikes, although these are the last rate hikes and must favor a final 25bp Fed rate hike in May.
The news about the financial crisis is increasing day by day and makes the risk aversion in the market more than past. In the last week, the markets’ concern about banking crises has decreased and now traders are focusing on economic data again.
The news about the financial crisis is increasing day by day and makes the risk aversion in the market more than past. Traders predict that the FED will not increase the interest rate and we show higher highs in gold prices but we have to wait for FOMC meeting on Wed
