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Currency Market Analysis

Jun 11, 2021 | Currency Market Analysis

Global Themes

USD lower with markets unfazed by CPI jump

The widely-hyped US inflation reading overnight was met with a collective shrug of the shoulders with the US dollar lower and the critical US ten-year bond yield tumbling to three-month lows.

Incredibly, the inflation read was well actually well above expectations, with the headline number at a 13-year high of 5.0% versus expectations of 4.7%.

The core number, which excluded food ad energy, also beat expectations with a 3.8% read well above the 3.4% forecast.

The benchmark US the-year bond yield fell from 1.49% to 1.43% in a sign that markets don’t believe the result will push the US Federal Reserve to change policy.

Sentiment boost

The prospects of US interest rates remaining low boosted sentiment in US shares.

The S&P 500 was up 0.5% while the tech-focused Nasdaq gained 1.0%.

The USDSGD fell 0.1%.

Manufacturing watch

The early numbers today come from the NZ economy with the Business NZ manufacturing gauge expected.

Later, UK GDP and US consumer confidence are released.

Next week, US retail sales are due on Tuesday while Thursday brings both the US Federal Reserve and local employment.

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