Market Analysis

The US dollar is gaining ground on other major currencies

 

FOREX

The US dollar is gaining ground on other major currencies during early Wednesday trading, ahead of the publication later in the day of American inflation numbers. The greenback, a safe haven currency, is finding support amidst a drop in risk appetite in the global financial markets that has seen the main stock indices drop from the all-time highs reached a few days earlier. Investors eye problems in the Chinese construction sector with some concern that they may spill over to the wider markets, on a day when Evergrande, the giant real estate company, is due to pay creditors almost $150 million in interest. The dollar is also supported by expectations that US inflation numbers will show a continuation of rising consumer prices, a scenario that will vindicate those within the Fed, such as James Bullard, the St Louis Fed President, who recently advocated for hiking rates next year.

Source: ActivTrader

 

GOLD

Gold retreated during the early part of Wednesday’s trading session, after reaching a multi-month high on Tuesday. The precious metal dropped as the US dollar gained ground on other major currencies, due to the inverted correlation between the two assets. The greenback was in demand as investors await the release of American inflation numbers later today, with the consensus amongst analysts pointing at the continuation of a rise in consumer prices. Such a scenario supports the case of some prominent Fed officials that the American central bank should start hiking interest rates in the new year.

Source: ActivTrader

 

 

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