Key Economic Indicators Today

Market Overview

The dollar is riding high, hitting a four-week peak ahead of the eagerly awaited U.S. inflation report this Wednesday. This report is set to be a game-changer, with the financial world holding its breath.

Analysts are betting that the U.S. central bank will keep rates steady after their two-day policy meeting concludes on Wednesday. Darren Richardson, COO at Richardson International Currency Exchange Inc., highlights, “The U.S. dollar is gaining strength as there are mounting concerns that the Fed might delay cutting interest rates.”

Despite facing several economic hurdles, the employment data has shown robust growth, emphasizing labor's pivotal role in driving market capacity. All eyes are on the CPI data set for release later today.

The forecast suggests a steady climb in Core CPI at 0.3%, while the annual CPI is projected at 3.4%. However, a slight deceleration is expected for the monthly CPI, predicted at 0.1%, down from last month's 0.3%.

Market participants, according to the CME FedWatch tool, have priced in around a 56% chance of a rate cut in September, a decrease from 77.8% just a week ago.

The Fed is widely anticipated to hold rates between 5.25% and 5.5%. The spotlight will be on the policymakers' updated economic projections, the “dot plot,” and Chair Jerome Powell's press conference, which will provide clues about the timing of future rate cuts.

Kieran Williams, head of Asia FX at InTouch Capital Markets, notes, “The consensus is shifting, with the number of cuts in 2024 expected to drop from three to two in the latest dot plot.” Powell is expected to strike a dovish tone during his press conference, reflecting disappointing growth indicators since the last Fed meeting.

Meanwhile, most currencies paired against the dollar have been relatively flat, awaiting the crucial data release.

We anticipate the data release to have a dovish impact on the market outlook, but caution against speculation. The market remains highly sensitive, with minor data changes capable of causing rapid price movements.

GOLD - Gold has entered a holding pattern, trading between 2314.890 and 2295.536, as it waits for the upcoming data release. The current price level suggests a higher probability of bearish momentum. We await further confirmation.

SILVER -Silver has maintained a steady course ahead of the data release, trading sideways between 29.900 and 29.018. The market is biding its time, and we are keenly watching for the next move.

DXY - The dollar index (DXY) is on a slow yet steady climb, showcasing bullish sentiment. The market is setting new higher highs and higher lows above 105.071, signaling strong upward momentum.

GBPUSD - The pound has slightly recovered from Monday's levels but is exhibiting a bearish sentiment. The formation of a triple top at 1.27938 suggests a potential downward move from the current price.

AUDUSD - The Australian dollar has stalled after rebounding from 0.65869, remaining below 0.66145. Further price action is awaited, but the likelihood of a downward move seems higher.

NZDUSD - The New Zealand dollar has been range-bound between 0.61408 and 0.60954. A brief push above 0.61408 was quickly rejected, highlighting a stronger bearish sentiment.

EURUSD - The euro has taken a hit, falling more sharply than other currencies following the BoE rate cuts. We expect further declines as bullish structures are broken. The price recently corrected from 1.07240.

USDJPY - The Japanese yen has confirmed a W pattern, with the market rising. Despite the current stagnation around 157.193, the bullish outlook for the yen remains strong.

USDCHF - The Swiss franc has been in a holding pattern ahead of the CPI data release. We await further confirmation before forming a market bias.

USDCAD - The Canadian dollar shows bullish tendencies following the BoC rate cuts. We expect further price increases from this point, pending the data release for confirmation.