On Wednesday, July 14, here’s everything you need to know:
The dollar has maintained its gains as a result of high US inflation and a soft bond auction. Powell, the chairman of the Federal Reserve, is expected to speak about recent events. The BOC is expected to follow the RBNZ in sending the kiwi higher on taper talk. The Delta covid version is also being considered, as are discussions about US infrastructure. China’s crackdown is causing cryptocurrency prices to plummet.
Inflation in the United States continues to rise: The headline Consumer Price Index increased by 5.4 percent, while the Core CPI increased by 4.5 percent, both above predictions. The greenback first rose, but eventually fell when information indicated that reopening-related factors such as used car pricing, car rentals, airlines, and other similar products were the key drivers.
See Analysis of Inflation: Is there a dollar-selling opportunity? The Fed may be able to ignore the clunker-driven CPI.
The dollar gained another lift as investors showed little interest in buying 30-year Treasury bonds in an auction, causing yields to rise. The 10-year benchmark is currently trading at 1.40 percent. Later in the day, US Producer Prices will be released.
The Federal Reserve’s Chair, Jerome Powell, will appear on Capitol Hill later today, and could reveal additional details about the bank’s plans to cut its bond-buying program in the face of growing inflation. His colleagues said the economy hasn’t made “significant further progress” toward its targets, referring to the job market.
Powell’s Preview: There are three reasons to believe the Fed Chair will lower the dollar.
Congress: While a bipartisan group of senators agreed on the amount of money to spend on infrastructure, they are still working out how to pay for it. Democrats, on the other hand, are considering going it alone.
The Reserve Bank of New Zealand stunned markets by announcing that it will end its asset purchase program next week, a more hawkish decision than expected. The RBNZ is expected to raise interest rates as soon as August, according to analysts. NZD/USD surged higher, reclaiming the 0.70 level.
The Bank of Canada is also expected to announce a cut in its weekly bond-buying program of C$3 billion, though the new levels are unknown. The USD/CAD exchange rate is now holding around 1.25. WTI Crude Oil has reached a level of stability around $75.
See The Bank of Canada is the central bank of Canada. Preview: To pave the path for a stronger CAD, QE will be tapered.
After the dollar storm, the EUR/USD is capped at 1.18, and Europe is dealing with an increase in coronavirus cases. Following warning that vaccination will be necessary for some activities, vaccination rates in France have increased. In recent days, the incidence rate in Spain, the Netherlands, and Portugal has been the greatest.
As the UK prepares to reopen on July 19 despite elevated levels of infections, the GBP/USD is staying at 1.38, weathering some of the dollar surge.
Sydney’s decision to extend its lockdown as covid spreads in Australia’s largest city is putting pressure on the AUD/USD.
Bitcoin has dropped below $32,000, while Ethereum has dropped below $1,900, after the Anhui province joined others in prohibiting the mining of digital assets.
More: Three reasons why Shiba Inu is one of the market’s most optimistic cryptocurrencies/n
