The US Dollar (USD) had a strong start to the week, building on previous gains and reaching its highest level since early August above 103.00. Industrial Production data for August will be released by Eurostat, along with sentiment data for the Eurozone and Germany by Germany’s ZEW economic research institute. Additionally, Statistics Canada will release September Consumer Price Index figures. In the afternoon, several Federal Reserve (Fed) policymakers will deliver speeches.
In the past 7 days, the US Dollar was the strongest against the Canadian Dollar, showing gains against most major currencies. The heat map illustrates the percentage changes of major currencies against each other. For example, the US Dollar experienced positive changes against the Euro, Pound, Japanese Yen, Canadian Dollar, Australian Dollar, New Zealand Dollar, and Swiss Franc.
In Japan, Industrial Production fell by 3.3% on a monthly basis in August, meeting market expectations. Prime Minister Shigeru Isihiba announced plans to compile a supplementary budget for the current fiscal year. The USD/JPY pair decreased slightly below 149.50. Meanwhile, EUR/USD dropped below 1.0900 for the first time in over two months, struggling to maintain its position.
USD/CAD continued its winning streak for a ninth consecutive trading day. The ILO Unemployment Rate in the UK eased to 4.0% in the three months to August. Employment Change data for August increased to 373K, while Average Earnings excluding Bonus rose 4.9% 3M YoY in August. GBP/USD remained steady around 1.3050.
Gold prices remained relatively stable on Monday, hovering near $2,650. Inflation measures the rise in the price of goods and services, with core inflation excluding volatile elements like food and fuel. Core inflation is targeted by central banks to maintain stability. Higher inflation typically leads to stronger currencies, while lower inflation can have the opposite effect. Gold’s value may vary depending on inflation rates, with higher inflation leading to higher interest rates that can impact Gold’s appeal as an investment.
In conclusion, the US Dollar remains strong, while various economic data releases and speeches from Fed policymakers are set to impact the market. Inflation plays a significant role in currency value, with higher inflation often leading to a stronger currency. Gold’s value may shift based on inflation rates and interest rate changes. Investors should keep an eye on economic indicators and central bank policies to make informed decisions in the volatile forex market.
