empty
 
 

10.08.202210:47 Forex Analysis & Reviews: Markets await the July inflation report in the US

Markets await the US inflation report for July as the data could completely change the balance of power on trading floors. This is why risk appetite fell on Tuesday, with major stock indices in both Europe and North America showing a noticeable drop.

According to forecasts, consumer inflation should slow to 0.2% m/m, but increase to 8.7% y/y in July. The reason is the insufficient supply of goods caused by the supply chain problems that have not yet been resolved.

Business and industrial activity also remain at a high level, the labor market is strong, and wages continue to rise. This indicates that inflation may remain above 6% until the end of this year.

Another factor to consider is the geopolitical tension that is currently happening. Most likely, oil prices will remain high, likely testing $120 once again. The recent decline in quotes has already led to a fall in gas prices in the US, albeit just temporarily.

With all this data, many are pondering whether the Fed will continue its aggressive increase of interest rates. If it does, pressure on the stock markets will rise, while dollar demand will remain strong. However, the situation in the forex market will not change much by the end of the year. EUR/USD may test 1.0000, at least until inflation decreases not only in July, but also in the coming months. In that case, the Fed will no longer seek further rate hikes, which, in turn, will weaken dollar and jump-start a bullish stock market.

Forecasts for today:

Exchange Rates 10.08.2022 analysis

Exchange Rates 10.08.2022 analysis

USD/CAD

The pair is trading below the resistance level of 1.2900. Negative market reaction to the US inflation report for July will most likely push the quote to 1.2980.

USD/JPY

The pair is trading above 134.70. A negative market reaction could push the quote down to 133.70.

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

Pati Gani,
Analytical expert of InstaForex
© 2007-2022
Benefit from analysts’ recommendations right now
Top up trading account
Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • Ferrari from InstaForex
    Top up your account with at least $1,000
    join the contest and win Ferrari
    F8 Tributo
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and win $1,000
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS
Can't speak right now?
Ask your question in the chat.