US Inflation Data Shakes Markets as Dollar Weakens

Hello traders, welcome on Friday morning. We are heading into the last trading day of the week, and the markets are digesting Thursday’s key data. Yesterday, the spotlight was on US inflation figures, which came in slightly higher than expected. Both core and headline CPI ticked up, pushing inflation concerns back to the forefront of investor minds. Initially, the data led to some strength in the US dollar, but as the day unfolded, the dollar lost ground in a surprising turn of events, considering that higher inflation typically supports the currency.

On the commodities front, Thursday brought mixed results. Precious metals like silver continued their downward trend, while gold, though also under pressure, remains near long-term highs. Oil saw significant volatility as well, initially attempting to rally but ultimately closing lower. The recent drop in oil prices could signal a pause in the recent bullish sentiment that has driven the market higher over the past week.

Looking ahead to today, we’ve already received GDP data from the UK, which came in as expected at 0.2%. This hasn’t had a major impact on the British pound so far. The big events of the day will be Canada’s job data and another inflation report from the US, this time focusing on producer prices (PPI). These numbers will be critical in setting the tone for the day, especially as traders seek more clarity on inflation trends and how central banks may respond.

Indices are flat this morning, with European and US futures showing minimal movement as traders await the upcoming data. Keep an eye on oil as well, as it could see more volatility after yesterday’s drop.

Source: https://www.axiory.com/analytics/market-news/us-inflation-data-shakes-markets-as-dollar-weakens