Forex Innovation

U.S. Core Consumer Price Index (CPI) MoM

The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

Release Date Time Actual Forecast Previous
Dec 13, 2022 (Nov) 08:30 0.3% 0.3%
Nov 10, 2022 (Oct) 08:30 0.3% 0.5% 0.6%
Oct 13, 2022 (Sep) 07:30 0.6% 0.5% 0.6%
Sep 13, 2022 (Aug) 07:30 0.6% 0.3% 0.3%
Aug 10, 2022 (Jul) 07:30 0.3% 0.5% 0.7%
Jul 13, 2022 (Jun) 07:30 0.7% 0.6% 0.6%

Asia FX sinks as caution over Fed, CPI inflation, boosts dollar
Investing.com-- Most Asian currencies fell on Monday, while the dollar rose as markets hunkered down ahead of highly awaited signals on U.S. monetary policy from a Federal Reserve meeting and a reading on U.S. consumer inflation.

Most regional units were also nursing losses from last week, amid growing concerns over a potential recession in 2023, which dented demand for risk-driven assets.

The South Korean won and the Malaysian ringgit fell 0.5% each - the most among their regional peers, while the Chinese yuan shed 0.3%.

Optimism over the withdrawal of anti-COVID measures in China was largely offset by fears that a big jump in local infections will delay a broader reopening. Analysts also forecast increased market volatility in the country as it re-emerges from nearly three years of COVID lockdowns.

Still, a Chinese reopening stands to benefit the Asian economies that depend on the country as a trading partner.

The Japanese yen fell 0.2% as data showed producer price inflation in the country rose more than expected, heralding increased pressure on the economy in the coming months.

The yen has also benefited in recent weeks from speculation that high inflation will force the Bank of Japan into eventually changing its ultra-loose stance on monetary policy.

The Indian rupee fell 0.3% ahead of consumer inflation data that is expected to show that price pressures eased further in November. But the Reserve Bank recently signaled that Indian inflation is expected to remain elevated in the near-term.

The dollar strengthened on Monday, as investors positioned for a potentially stronger-than-expected consumer price index (CPI) reading on Tuesday. Data released last week showed that producer price inflation eased less than expected in November, heralding a similar trend in the CPI.

The dollar index and dollar futures both rose 0.3%, and hovered near 105 points

A stronger-than-expected inflation reading could invite more hawkish signals from the Federal Reserve, at the conclusion of its two-day meeting on Wednesday.

While the central bank is expected to hike rates by a relatively smaller 50 basis points this week, stronger-than-expected inflation could push it into keeping rates higher for longer than expected.

Strong U.S. data for November ramped up concerns that inflation could remain sticky in the near-term. This invited warnings over a potential U.S. recession in 2023, which dented Asian currencies in recent sessions.

Rising U.S. interest rates were the biggest weight on Asian currencies this year, as the gap between risky and low-risk yields narrowed.

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Asia FX turns cautious ahead of U.S. payrolls, dollar hits 3-mth low

Investing.com-- Most Asian currencies moved little on Friday as caution kicked in ahead of U.S. payrolls data that is likely to affect monetary policy, although dovish signals from the Federal Reserve pushed the dollar to a three-month low.

Regional currencies were also set for strong gains this week as the Federal Reserve flagged smaller interest rate hikes in the coming months- a scenario that is positive for risk-driven assets.

The Japanese yen rose 0.1%, and was the best performing Asian currency this week, up nearly 3% at a three-and-a-half-month high of 135.19 as it recovered further from a 30-year low.

The Chinese yuan fell 0.2%, although speculation that China will relax its strict anti-COVID policies saw the currency set for a 1.7% gain this week.

Growing public discontent with the country’s anti-COVID restrictions sparked a wave of unprecedented protests in the country this week, which also saw the government loosen some quarantine and movement measures in two major cities.

Weak PMI data, which highlighted even more pressure on the Chinese economy in recent months, also drummed up hopes that the government will be forced into relaxing its COVID policies. But Beijing has given no official word on such a move.

Broader Asian currencies were muted on Friday. The South Korean won rose 0.4% and was set to add 2.6% this week, while the Taiwan dollar headed for a weekly gain of 1.3%.

The dollar index and dollar index futures both moved little on Friday, but were set to lose 1.1% this week, their second straight week of losses.

Focus is now on U.S. nonfarm payrolls data due later in the day, which is expected to show that the country’s jobs market cooled slightly in November. The Fed has also targeted some cooling in the labor market as part of its measures against inflation this year.

But Powell warned that U.S. interest rates could peak at higher-than-expected levels, especially if inflation remains stubbornly high in the country.

PCE inflation data, which is the Fed’s preferred gauge of price pressures, was steady at an annualized rate of 6% in October, data showed on Thursday, remaining well above the Fed’s 2% target.

In Southeast Asia, the Thai baht was the best performer this week with a 2.6% gain following an interest rate hike and more hawkish signals from the country’s central bank.

The Indonesian rupiah jumped 0.8% and was the best performer on Friday after strong inflation readings for November suggested that the central bank will keep raising interest rates.

Rouble rebounds vs dollar as Russian market reopens after long weekend......

MOSCOW (Reuters) - The rouble strengthened on Monday, belatedly responding to last Friday's dollar weakness as it pulled away from its lowest point since mid-October that was hit before the Russian market closed for a three-day weekend.

At 0741 GMT, the rouble was 0.9% stronger against the dollar at 61.53 and had gained 0.1% to trade at 60.95 versus the euro. It had shed 0.6% against the yuan to 8.45.

Better-than-expected U.S. jobs data saw the dollar fall on Friday, when the Russian market was closed. The positive rouble dynamics on Monday morning were a reaction to that, said Banki.ru chief analyst Bogdan Zvarich in a note.

He said the rouble would likely consolidate in the 61.5-62 range for most of the session.

The rouble is the world's best-performing currency this year, supported by capital controls and an initial collapse in imports as a result of Western sanctions on Russia over its actions in Ukraine, and scores of foreign companies pausing operations in the country.

The range at which the rouble trades in November could widen as imports could recover further, but high prices of Russian exports promise considerable foreign currency inflows, Otkritie Research said.

Brent crude oil, a global benchmark for Russia's main export, which hit a more than two-month high in the previous session, was down 1.3% at $97.3 a barrel.

"The Russian market is set for a neutral opening, though crude has every chance to drive the market higher," said BCS Global Markets in a note.

Stocks opened higher, returning towards the around six-weeks highs seen last week, after a one-session blip.

The dollar-denominated RTS index was up 1.8% to 1,114.0 points. The rouble-based MOEX Russian index was 0.9% lower at 2,176.2 points.

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For the last year and a half, it’s been OPEC+ running the show, but U.S. production is coming back already, and it’s going to come back more in 2022.
Oil was up Thursday morning in Asia, continuing an upward trend as data showed a decline in U.S. crude and fuel inventories last week. This soothed investor worries that rising COVID-19 cases had dampened fuel demand.
China, the world’s biggest oil importer, continues to battle an outbreak in the western city of Xi’an.

Oil has been trading at its highest level in a month as U.S. government data indicated lower oil inventories. Wednesday’s crude oil supply data from the U.S. Energy Information Administration showed a draw of 3.576 million barrels for the week to Dec. 24.

Forecasts prepared by Investing.com predicted a 3.233-million-barrel draw, while a 4.715-million-barrel draw was recorded last week.

Russian Deputy Prime Minister Alexander Novak also said that the Organization of the Petroleum Exporting Countries and Allies (OPEC+) has resisted U.S.-led calls to boost output as it wants to provide the market with clear guidance and not deviate from policy on gradual increases to productions.

Investors are looking to see how an OPEC+ meeting on Jan. 4 will pan out. The meeting will see the cartel decide whether to proceed with a planned production increase of 400,000 barrels per day in February 2022. During its last meeting earlier in the month, OPEC+ decided to boost output for January despite the rise of the omicron COVID-19 variant.

Oil prices rose on Friday, tracking towards a 4.2% gain for the week on signs some industries have begun switching fuel from high priced gas to oil and on doubts the U.S. government would release oil from its strategic reserves for now.
U.S. West Texas Intermediate (WTI) crude futures climbed by 84 cents, or 1.1%, to $79.14 a barrel at 0122 GMT.

Oil prices lifted after the U.S Energy Department said it has no plan 'at this time' to tap into U.S. strategic oil reserves to cool the rally in oil prices.

Overall, the week's run-up has been spurred by soaring gas prices encouraging a switch to oil for power generation and by some industries, along with a decision by the Organization of Petroleum Exporting Countries and allies led by Russia, together called OPEC+, to stick to plans to add only 400,000 barrels per day of supply in November.

Analysts said the surge in gas prices and the extent of fuel switching from gas to oil will be the key factors to watch now.

The week has been a positive one overall for the black liquid, thanks to a switch to oil for power generation and by some industries, as gas prices increase. The Organization of Petroleum Exporting Countries and allies (OPEC) also decided to continue with its plans to add only 400,000 barrels per day of supply in November 2021 when it met earlier in the week.

The surge in gas prices and the extent of fuel switching from gas to oil will be the key factor for investors to watch.

The U.S. dollar drifted below a one-year high versus major peers on Tuesday as traders waited on key U.S. payrolls data at the end of the week for clues on the timing of a tapering of Federal Reserve stimulus and the start of interest rate hikes.

Friday's nonfarm payrolls data is expected to show continued improvement in the labour market, with a forecast for 488,000 jobs to have been added in September, according to a Reuters poll - enough to keep the Fed on course to begin tapering before year's end.

On Aug. 19, the second-largest mortgage lender in the U.S., UWM Holdings, announced it would start accepting Bitcoin for home loans. The adoption could take effect by the end of the third quarter, and the company is also considering adding other cryptocurrencies like Ethereum into the mix.

Bitcoin recently neared $50,000 as it continues to rebound after months of weakness.

The world’s largest digital currency by market value rose to $49,821 on Saturday afternoon in New York, according to data from Coinbase. It was trading at a price of $48,876 as of 10 a.m. ET on Sunday.

The recovery comes after Bitcoin was trading at a price between roughly $30,000 and $40,000 over the last several months. It had dropped from a record of almost $65,000 in mid-April.

PayPal will let British customers buy, hold and sell digital currencies, starting this week.

It marks the first international expansion of PayPal’s crypto product since it launched in the U.S. last year.

PayPal is one of many firms taking a leap into the mostly unregulated world of cryptocurrencies.

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