US Dollar consolidates gains as focus shifts to US CPI

  • November 10, 2022

Here is what you need to know on Thursday, November 10:

The US Dollar (USD) stays relatively quiet early against its major rivals early Thursday as investors remain on the sidelines while awaiting the October Consumer Price Index (CPI) data. The risk-averse market environment helped the USD hold its ground and the market mood stays neutral in the European morning with US stock index futures trading flat on the day. The European Central Bank (ECB) is scheduled to release its Economic Bulletin later in the session. In addition to the inflation data, the US economic docket will feature the weekly Initial Jobless Claims figures as well. 

US Inflation Preview: Markets set to seize on falling Core CPI to revive pivot play, three scenarios.

Following the risk rally witnessed earlier in the week, the negative shift witnessed in risk sentiment caused Wall Street’s main indexes to suffer heavy losses. Meanwhile, the benchmark 10-year US Treasury bond yield extends its sideways grind above 4% after having registered small losses on Tuesday. 

US October CPI Preview: US Dollar to weaken on a CPI-inspired risk rally.

According to the Associated Press, Republicans have 207 seats in the House, compared to 184 Democrat seats, and 48 seats in the Senate. 51 seats and 218 seats are required to gain the majority in the Senate and the House, respectively. The outcome of the US Midterm Election is unlikely to be finalized in the near term as the control of the Senate is expected to be decided following a runoff election in Georgia. 

EURUSD snapped a three-day winning streak on Wednesday but managed to close above the key parity mark. The pair was last seen moving sideways slightly above 1.0000. ,

GBPUSD lost nearly 200 pips on Wednesday but staged a modest rebound during the Asian trading hours on Thursday. The pair, however, stays below 1.1400 as the US Dollar’s market valuation continues to drive the action.

Supported by the renewed USD strength, USDJPY closed in positive territory on Wednesday. The pair stays relatively quiet at around 146.50 on Thursday. Bank of Japan (BoJ) Governor Haruhiko said earlier in the day that he told Prime inister Fumio Kishida that they will conduct monetary easing to achieve the price target in tandem with wage growth.

Despite the US Dollar’s upbeat performance, gold fell only marginally on Wednesday as US yields edged lower. XAUUSD holds above key $1,700 mark ahead of the US CPI data.

Following Wednesday’s heavy selloff in cryptocurrency markets, Bitcoin tries to stage a recovery. BTCUSD, which touched its weakest level in nearly two years at $15,500 late Wednesday, was last seen rising 5% on the day at $16,700. Ethereum lost nearly 18% on Wednesday and fell below $1,100 for the first time since July. ETHUSD was last seen rising 8% on the day at $1,200.