Dollar Retreats Despite Hotter US Inflation, Friday Opens Cautious

Hello traders, welcome to Friday. We are stepping into the last session of the week with fresh momentum and some important data ahead.

Thursday brought us the long-awaited CPI numbers from the US. Headline inflation came at 2.9% on a yearly basis, in line with expectations, but the monthly number surprised slightly higher at 0.4% instead of 0.3%. Normally, this should have fueled further dollar strength — but the opposite happened. The greenback slipped, leaving traders puzzled and sparking heavy moves across FX pairs. At the same time, the ECB left rates unchanged at 2.15% and delivered no major surprises in the statement or press conference, keeping the euro stable ahead of the inflation release.

On the market side, indices ended Thursday higher. Despite some hesitation early on, buyers stepped in strongly after the CPI reaction, pushing US indices firmly into the green. In Europe, DAX remained more cautious, lagging behind its American peers. Commodities had an exciting day too: silver broke out to fresh long-term highs, gold followed higher, while oil lost its footing and erased most of the week’s gains in a sharp drop.

Friday starts with a cautious mood. In early European trading, the dollar is flat after Thursday’s rollercoaster, with a slight bid on the yen suggesting defensive positioning. Commodities are mixed — gold and silver are consolidating after yesterday’s rally, oil is still under pressure. Indices are opening lower on futures, giving back some of Thursday’s optimism. And on the calendar, all eyes turn to the UK GDP release and later, the University of Michigan consumer sentiment from the US.

Source:https://www.axiory.com/analytics/market-news/dollar-retreats-despite-hotter-us-inflation-friday