Week Ahead: U.S. Inflation Report Coming Up as Dollar Storms Higher
XM Group | Aug 04, 2023 09:09AM ET
Dollar shines ahead of inflation test
Global markets are still reeling from the aftershocks of the US credit downgrade. Coupled with the Treasury’s announcement that it will be increasing its bond issuance in the coming months, these events propelled US yields higher this week, boosting the dollar through the interest rate channel.
The dollar attracted some safe-haven flows too, as riskier assets such as stocks suffered from the spike in yields. Moving forward, the question is whether this is the beginning of a lasting recovery in the US dollar, or simply a correction within the prevailing downtrend that started last year.
Over in China, the downturn in the manufacturing sector has taken a heavy toll on the economy and the stimulus measures announced by Beijing so far seem insufficient to turn the tide. This puts extra emphasis on the trade and inflation numbers for July, which will be released on Tuesday and Wednesday, respectively.
Another disappointing dataset could amplify concerns about the health of the world’s second-largest economy, and by extension, keep China-sensitive currencies like the Australian dollar under pressure.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.