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EUR/USD Gains Below 1.0800 After Softer US CPI Data

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

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

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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  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.