The US experienced a cooling of inflation in November, as reflected by the Consumer Price Index (CPI). The CPI saw a modest 0.1% increase during the month, resulting in a slowdown of the annual rate from 3.2% in October to 3.1% in November. Notably, the core annual reading remained steady at 4%.
EUR/USD has retreated from its gains below the 1.0800 level in American trading on Tuesday. The US Dollar is rebounding as the latest US CPI report indicates increased price pressures, leading to a shift in market expectations regarding Fed rate cuts.
EURUSD Daily Chart
Bearish Start to the Week and Early Tuesday Recovery
After a bearish start to the week, EUR/USD managed to stabilize during the American trading hours on Monday, closing the day with minimal changes. The pair initially gained traction early Tuesday, approaching the 1.0800 mark amidst decreasing US yields. However, investors might be cautious about betting on further weakness in the US Dollar ahead of the highly-anticipated November inflation report.
Impact of Absence of High-Tier Data Releases
With the absence of major data releases, the relatively positive market sentiment made it challenging for the USD to maintain its strength on Monday. Additionally, the high-yield at the recent 10-year US Treasury note auction decreased to 4.29% from the previous auction’s 4.51%. This decline caused US T-bond yields to decrease further, adding pressure on the USD.
GBP/USD Retreats Towards 1.2500 Amid US CPI Data Meeting Expectations and US Dollar Recovery
The GBP/USD is pulling back from its recent gains and approaching the 1.2500 level. This movement comes after the release of US CPI data that matched expectations. As a result, there has been an overall recovery in the US Dollar, bolstered by higher US Treasury bond yields. Furthermore, the pair is experiencing pressure due to a decrease in UK wage inflation during October.
GBPUSD Daily Chart
Gold Price Holds Steady around $1,990 Amid US Inflation Data
The gold price is maintaining its range around $1,990, with a temporary surge towards $2,000 following the release of US CPI data. Despite the US inflation data meeting expectations, the US Dollar is recovering alongside US Treasury bond yields.
XAUUSD Daily Chart
Market Participants Exercise Caution Ahead of November CPI and FOMC Meeting, Leading to Bitcoin Price Decline
Market participants adopted a cautious approach in anticipation of the release of the November US Consumer Price Index (CPI) and the Federal Open Market Committee (FOMC) meeting. As a result, Bitcoin (BTC) price experienced a 5% decline since Monday. Currently, BTC is in a consolidation phase following a rebound from $40,222 on Tuesday.
AUD/USD Spikes and Falls on US Inflation Data, Hovers Ahead of FOMC Decision
The AUD/USD experienced a spike to 0.6612 following the release of the US inflation data. However, it later fell to around its daily low near 0.6550. Currently, the pair is hovering around 0.6570 as markets digest the data in anticipation of Wednesday’s FOMC decision.
AUDUSD Daily Chart
The Federal Reserve (Fed) is set to announce its monetary policy decisions and release the revised Summary of Economic Projections (SEP) on Wednesday. A soft inflation report could increase the likelihood of dovish Fed bets.
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