FXTM information and reviews
OctaFX information and reviews
XM information and reviews
FXCC information and reviews
Libertex information and reviews
FxPro information and reviews

Record high Eurozone CPI highlights policymakers' dilemma

31 August 2022

US equities fell for a third straight day as higher rate expectations continued to hurt stocks. Both the broad S&P500 and the tech-heavy Nasdaq ended 1.1% lower. The VIX hit its highest level since mid-July though it retreated modestly late on. Asian stocks have traded mixed after China’s PMI printed slightly better than expected. European equities have turned red after opening up positive. US futures are pointing to a modest up day.

USD is looking to challenge recent highs this morning. This week’s multi-year top at 109.47 and 110 are the target for bulls. EUR has dropped below parity after higher-than-expected CPI data for the eurozone. GBP continues to sink as it makes new lows. USD/JPY broke higher this week and is consolidating ahead of the cycle high at 139.38. USD/CAD has broken resistance as oil falls rapidly. The July spike top at 1.3223 is the key upside level.  

Market Thoughts – UK CPI to go above 22%?

A Citigroup strategist recently grabbed the headlines predicting that UK CPI would rise above 18%. Now Goldman Sachs are warning that consumer prices could actually hit 22.4% next year if energy prices continue their upwards spiral. This comes after British households were hit with a projected 80% increase in their energy bills in the coming months.

Even if energy costs moderate, the venerable investment bank forecast that UK peak inflation is still likely to hit 14.8% in the new year. This is well above the 13.3% estimate by the Bank of England made earlier this month. It all bodes ill for sterling even though the MPC will keep hiking rates. GBP is heading for its seventh week of losses in eight as markets focus on the incoming big growth slump.

Chart of the Day – Cable struggling to break bearish momentum

GBP/USD made a new cycle low yesterday at 1.1621 after touching previous support/resistance at the mid-July low at 1.1759. But today has seen more selling as prices head for 1.16. Downward momentum will remain unless 1.1759 can be taken, and prices rise above 1.18 in the medium-term.

GBP/USD made a new cycle low yesterday at 1.1621

The downside target is the spike low from the March 2020 pandemic low at 1.1409. A long recession is likely with eye-watering levels of inflation on the cards. The new UK PM will offer more help to businesses and households to cope with rampant energy bills. Whether that just adds to the inflationary mix remains to be seen.




Penny Stocks: What Are They?
Penny Stocks: What Are They?

Locating penny stocks with buy ratings is getting more and more challenging. The markets become less adventurous as interest rates rise. That indicates that penny stocks, which are riskier by definition...

20 Sep 2022

Bitcoin and Ethereum: Inflation Brought Down The Prices
Bitcoin and Ethereum: Inflation Brought Down The Prices

Strong inflation brought down the price of bitcoin yesterday from $22,800 to the $20,000 support level. This morning, the price of Ethereum formed a new seven-day low at the $1550 level...

15 Sep 2022

Cooler USD & Stocks Higher Ahead of CPI
Cooler USD & Stocks Higher Ahead of CPI

USDIndex – Slips (108.00 tested) for a 5th straight day, lifting EUR & GBP. Fed Funds Futures back to 90% chance of 75 bp (third consecutive) hike...

14 Sep 2022

Copper’s Price: What’s happening?
Copper’s Price: What’s happening?

In this article, we will discuss what has happened to the price of copper. When your money loses some of its purchasing power, you stop caring about supply and demand...

14 Sep 2022

The Inflation Monster Strikes. Better One Small Fish Than An Empty Dish
The Inflation Monster Strikes. Better One Small Fish Than An Empty Dish

London Mayor Sadiq Khan says that millions of Britons won’t be able to afford heating or basic food this winter if things remain as they are now. The present state of affairs has no precedents in the past...

9 Sep 2022

After a recent selloff, Wall Street is expected to rise
After a recent selloff, Wall Street is expected to rise

Expectations that the Federal Reserve might lower interest rates to combat inflation. This idea did not have a chance because of the labor market data. Investors are concerned...

7 Sep 2022

Editors' Picks

HFM information and reviews
IronFX information and reviews
FXCM information and reviews
NordFX information and reviews
Vantage information and reviews
FP Markets information and reviews
FP Markets

© 2006-2022 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.