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Daily Analysis Report 13 June '2022

Daily Analysis Report 13 June '2022

EUR/USD  

The European currency is losing ground versus the US dollar, testing 1.0500 for a break and updating local lows from May 19. Investors are assessing the US macroeconomic data provided on Friday, which has caused them to reconsider the US Federal Reserve’s monetary policy possibilities. In May, the Consumer Price Index in the United States increased from 0.3 percent to 1.0 percent, exceeding market expectations of 0.7 percent. Inflation has returned to 40-year highs, reaching a fresh high of 8.6 percent in April, while consumer prices jumped by 8.3 percent. Simultaneously, the CPI excluding food and energy fell from 6.2 percent to 6.0 percent in May.

Contrary to projections, inflation in the United States does not appear to have reached it is high. In this sense, it is likely that the US Federal Reserve will continue to raise interest rates by the end of the summer and may even tighten its “hawkish” stance. Analysts at Barclays Bank, for example, anticipate the US Federal Reserve will hike rates by 75 basis points at its next meeting on Wednesday.

GBP/USD

During the morning session, the British pound is trading in a decline versus the US dollar, updating local lows from May 16. The GBP/USD currency pair is attempting 1.2300 for a break, prompted by US consumer inflation data issued on Friday, indicating a further price acceleration rather than a gradual decrease. In May, the annual rate hit a new high of 8.6%, prompting a reconsideration of the US Federal Reserve’s monetary policy possibilities. At the meeting on Wednesday, June 15, it is expected that the US regulator will aim to raise its “hawkish” rhetoric over the pace of interest rate hikes. On the other hand, the Bank of England’s interest rate representative meeting is set for Thursday, June 16. The value is projected to rise due to the UK regulator’s actions; in addition, officials’ comments will be crucial. The UK will release a large set of macroeconomic information on Monday and Tuesday to help markets prepare for the regulator’s final meeting. After a brief dip in April, price growth rates in the United States rose to 8.6% in May. Not the most reliable macroeconomic indicators from New Zealand, in turn, exert pressure on the New Zealand dollar’s holdings. In May, electronic card retail sales fell from 7.1 percent to 1.9 percent. Sales fell from 2.1 percent to 0.7 percent on an annual basis.

USD/JPY

Compared to the Japanese yen, the US dollar has been relatively active, renewing record highs and testing 135.00 for a breakout. The dollar is seeing renewed buying activity at the start of the week, as traders expect the US Federal Reserve to tighten monetary policy further at its meeting on Wednesday. Furthermore, based on US macroeconomic data provided last Friday, it is anticipated that the regulator would tighten its “hawkish” stance by hiking interest rates by 75 basis points at its June meeting. The figures indicated that inflation in the country had accelerated, implying that consumer prices had not yet reached their peak in April. The Bank of Japan will hold a meeting of representatives this week; nonetheless, the regulator aims to maintain its loose monetary policy and is prepared to provide extra stimulus if the situation warrants it.

XAU/USD

Gold prices have begun to adjust, retreating from their local highs of May 9, which were updated at the start of the week. Long positions initiated last Friday when demand for XAU/USD soared again after the release of multidirectional macroeconomic indicators on inflation in the US was being liquidated by investors. According to newly available statistics, the hand accelerated to 8.1 percent in May, a new high since December 1981. Every month, the country’s Consumer Price Index increased from 0.3 percent in April to 0.7 percent in May. As a result of the revision of inflation figures, the US Federal Reserve is likely to adopt a more aggressive strategy aimed at tightening monetary conditions. The regulator may choose to hike interest rates more quickly, for example, by 75 basis points, or to continue the planned value adjustment after two meetings in June and July. It was previously believed that following two rate hikes in the summer, officials would take a breather to examine the impact of the actions implemented on the economy and consumer price growth.

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