USD gains as US CPI rates accelerate

USD regains some ground as high CPI rates provide support

USD extended gains in today’s Asian session as the higher US CPI rates for October flared up the market’s expectations for the Fed to tighten its monetary policy at a faster pace. Furthermore, we note that Fed Board Governor Waller set on the table the possibility of a double rate hike in the December meeting, enhancing further the market’s hawkish expectations. We focus also on GBP pairs as we get the preliminary UK GDP rates for Q3 tomorrow and a possible acceleration could support GBP.

Anthropic’s IPO gains traction

US stock markets edged lower yesterday given the acceleration of the US CPI rates for October. Nevertheless, the market seems to be regaining its confidence with Anthropic’s IPO gaining traction. The Company’s share is to go live under the ticker ANT on the 19^th of November, with the price range being $70-$78 per share, of which 825 million Class A common shares are to be offered which could provide a valuation of $1.4 trillion on a fully diluted basis. Meanwhile, Nvidia’s share price continued to fall, given the recent scandal regarding CEO Jensen Huang’s affair with an alleged Chinese spy.

Oil prices stabilise

Oil prices stabilised on Wednesday remaining near yesterday’s two-month lows. Oil market participants are getting conflicting fundamentals, as on the one hand the market hopes for a possible diplomatic solution are still present, while on the other, attacks on shipping in the Straits of Hormuz continue. Possible enhancement of market worries could push oil prices higher.

Gold’s price edges lower

Gold’s ‌price edged higher in today’s Asian session after notable losses yesterday. Yet any gains seem to be immaterial as the enhancement of the market’s hawkish expectations for the Fed tend to weigh on the precious metal’s price. We note that the release of the US PPI rates for October in tomorrow’s Asian session, could be the next big test for gold’s price and a possible acceleration of the rates could enhance market worries for inflationary pressures in the US economy, weighing on gold’s price.

Other highlights for today

Later today we note the release of New Zealand’s Electronic Card retail sales for October. In tomorrow’s Asian session, we get Japan’s PPI rates for October and later on we get Sweden’s CPI rates for October. On a monetary level, we note that RBA MPB member Baker, BoJ Board Member Asada and ECB’s Elderson speak.

Charts to keep an eye out

GBP/USD Cash Daily Chart

GBP/USD moved lower aiming for the 1.3300 (S1) support line. The RSI indicator dropped below the reading of 50, implying a bearish market predisposition for the pair. We note the bearish market tendencies for cable, yet for the time being we maintain a sideways movement bias for pair between the R1 and the S1. For a bearish outlook to emerge, we would require the pair to break the 1.3300 (S1) support line and start aiming for the 1.3155 (S2) support level. Should the bulls take over, we may see GBP/USD reversing yesterday’s losses and the 1.3510 (R1) resistance line, and start aiming for the 1.3655 (R2) resistance level.

XAU/USD Daily Chart

XAU/USD’s price action, edged lower yesterday, yet continues to be well within the boundaries set by the 3960 (S1) support line and the 4275 (R1) resistance level. We maintain yesterday’s sideways motion bias given also that the RSI indicator remains near the reading of 50. Should the bulls take over we may see gold’s price breaking the 4275 (R1) resistance line and start aiming for the 4550 (R2) resistance base.  Should the bears take over, gold’s price may drop below the 3960 (S1) support line and start aiming for the 3600 (S2) support level.

DISCLAIMER: This content is for general informational and educational purposes only and should not be considered investment advice or investment recommendation.