Tuesday, 9 August 2022

[EUR] The Sidling Dollar ahead of CPI 2022 0810



cf. [EUR] The Expected Giant Step after the Non-farm Payrolls  2022 0806


The reports from Gjallarhorn are produced by a trader, not by an analyst. The reports are provided to the investors showing the trader's view on the market.


Gjallarhorn has a short position of the euro in CME, now.


The currency pair EUR/USD has fluctuated for weeks. And it awaits the CPI, Consumer Price Index release on Wednesday. The up-and-down move in the sidling Bollinger Bands seems to accumulate the momentum.


The dollar was in the correction ahead of the U.S. CPI. The market reacts seriously if the CPI shows the inflation excceeds the market expectation. Because it support the Fed's hawkish stance.


The market expects CPI in July will be 8.7 percent less than that in June of 9.1 percent. The market thinks the inflationary pressure support the Fed's giant step. Someone forecasts the 100 bp hike of the benchmark rate in September.


The strategist Edward Moya of Oanda said, the additional bullish dollar if the inflation rises more and more.


A forex analyst of Societe Generale worried the inflation. He also agreed the more inflation will support the 75bp rate hike in September. He said, the Fed may hike the benchmark rate more and it isn't the time to sell the greenback.


An economist analysed the recession from the reversed U.S. yield curve but he expected the Fed would stop the rate hike and cut it in next year.


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