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13.11.202308:54 Forex Analysis & Reviews: Easing US inflation may cause widespread rally in the markets

Economic reports scheduled to come out this week will likely have a considerable impact on market sentiment. Traders will focus on the release of manufacturing data from China, Eurozone, and the US, as well as the values of consumer inflation in UK and the Eurozone. But the most important one will be the Consumer Price Index (CPI) from the US, which forecasts say will slow from 3.7% to 3.3% y/y and grow by only 0.1% m/m.

If the numbers do not disappoint and remain in line with expectations or even slightly lower, risk appetite will surge, leading to demand for US Treasury bonds and fall in the value of dollar. It will also lessen the need of the Fed to continue raising interest rates, at least until the end of the year.

Furthermore, any easing in inflation will cause a new rally in the stock markets, not only in the US but also worldwide. Dollar will decline, albeit not as significant as expected. The interest rate differentials between the Fed and other global central banks will also stabilize.

The recovery that began in late October will resume and will likely strengthen further if news from the US confirms a significant slowdown in inflation.

Forecasts for today:

Exchange Rates 13.11.2023 analysis

Exchange Rates 13.11.2023 analysis

AUD/USD:

The pair consolidated ahead of the opening of the European trading session, in anticipation of fresh inflation data from the US. Confirmation of its decrease will lead to the further rise above 0.6385 and towards 0.6525.

GBP/USD:

The pair trades under 1.2265, but positive news from the US regarding inflation could stimulate an upward movement towards 1.2400.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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