Greenback soars to multi-month highs amid rising inflation

The Dollar index rose above 95.00 today, the level last seen in July 2020, pushing the EURUSD pair below 1.15, the GBPUSD pair below 1.34, and the USDJPY pair above 114 as traders bought the USD after the latest US inflation report.

On Wednesday, data showed that US inflation rose at the fastest pace since 1982, printing 6.2% YoY in October, way higher than the +5.9% YoY expected and accelerating from September’s 5.4% YoY. In addition, the core inflation indicator also rose notably to 4.6%, up from 4% previously. 

Inflation shows no signs of stopping, and it certainly won’t be temporary,  but we keep hearing the same old song by the central bankers. 

US yields soared dramatically, pushing the 10-year yield from 1.44% to 1.57% currently, while the short-term two-year yield jumped above 0.5% again. Thus, it looks like yields have renewed their medium-term uptrends as traders now expect the Fed to hike rates two times in 2022.

Despite soaring US dollar and rocketing yields, precious metals were bid. Gold rose above the critical resistance of 1,830 USD and traded at 1,860 USD today, while silver was trying to settle above 25 USD.

Elsewhere, oil fell dramatically, and the daily chart now looks like a triple top pattern, with the resistance at 85 USD, possibly leading to lower oil prices short-term. 

US stocks declined from their overbought conditions as rate hike expectations increased, but so far, all important supports have been held. 

Source: https://www.axiory.com/market-news/greenback-soars-to-multi-month-highs-amid-rising-inflation