FX insights

U.S Inflation at Highest Level Since 1990

april 13 fx market news

What’s new?

U.S consumer prices rose 8.5% in March from a year earlier and 1.2% from February, which is the biggest increase in 40 years. Half point percentage hike in May seems a done deal now. Gasoline drove half of the monthly increase, while the food was also a sizeable contributor. The biggest drop is in used vehicles.RBNZ hiked the rate by 0.5% today, the biggest hike in 22 years. It lifted the cash rate from 1% to 1.5%, the first time it has delivered an increase that big since the dot.com bubble in 2000. The RBNZ has raised the cash rate 4 times in a row to fight 32-year high inflation.

China cut to 10 days from 14 days quarantines time. A sign China might finally ease its zero-cases policy and reopen to the world. Shanghai posted a new daily record for Covid-19. Most of the new cases are in people already in isolation facilities. China will continue to ease restriction when the number of cases found among people who aren’t yet in quarantine fall to zero.

The EUR continues to fall as the war in Ukraine doesn’t show in the sign of improvement. U.S said it will send a total of $750B of military stocks to assist Ukraine. The total amount of aid provided is $2.4B so far. Poutine reaffirmed that "the operation will continue until its full completion and the fulfillment of the tasks that have been set. ".

USD/JPY breaks 2015 high to hit 126 level. The U.S CPI, as expected was enough to weigh on JPY.

What’s in the pipe?

  • Bank of Canada rate decision, Wednesday
  • EIA crude oil inventory report, Wednesday
  • China trade, medium-term lending facilities, Wednesday
  • ECB rate decision, Thursday
  • Bank of Korea policy decision, Thursday
  • U.S. retail sales, initial jobless claims, business inventories, University of Michigan consumer sentiment, Thursday
  • Cleveland Fed President Loretta Mester, Philadelphia Fed President Patrick Harker due to speak Thursday
  • U.S. stock and bond markets are among those closed for Good Friday

FX rates

USD/JPY @ 126.04 - bullish trend

RSI: Overbought

Williams %R: Overbought

Top break oblique resistance: 126.0

EUR/USD @ 1.0835 - Bearish trend

GBP/USD @ 1.2998 - Bearish trendBottom break horizontal support : 1.3010

AUD/USD @ 0.7440

USD/CNH @ 6.3744

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