Friday, October 11 began with markets stabilizing after a volatile day on Thursday. The US economic calendar includes the Producer Price Index (PPI) data for September and the University of Michigan’s Consumer Sentiment Survey for October, while Statistics Canada will also publish labor market data for September in the early American session.
The US Dollar had a strong week, with the biggest gains against the Canadian Dollar. The table shows percentage changes of the US Dollar against major currencies, with the heat map displaying percentage changes of major currencies against each other.
Inflation in the US, as measured by the change in the Consumer Price Index (CPI), declined to 2.4% on a yearly basis in September, while the core CPI, excluding food and energy, rose 3.3% on a yearly basis. The US Dollar failed to benefit from these readings as initial jobless claims increased sharply. After hitting a nearly month-high, the USD Index closed flat and went into consolidation below 103.00 early Friday.
The UK’s Gross Domestic Product expanded by 0.2% in August, with Industrial Production and Manufacturing Production also increasing during the same period. GBP/USD edged slightly higher, while EUR/USD remained flat and slightly below 1.0950. USD/CAD continued its uptrend, while USD/JPY closed in the red after reversing from a multi-month high.
Gold rebounded and edged higher towards $1,650 on Friday after a six-day losing streak. Inflation is measured by the rise in the price of goods and services, with core inflation excluding volatile elements. Higher inflation usually results in a stronger currency due to higher interest rates. Gold is often seen as a safe-haven asset in times of market turmoil, but can be negatively impacted by higher interest rates resulting from high inflation. Lower inflation tends to be positive for Gold as it brings interest rates down.
