Latest Forex News and Analysis for August 11, 2023
Staying up-to-date with the latest forex news and analysis is crucial for informing trading decisions and strategies. Here is a rundown of key stories impacting the forex market on August 11, 2023.
Here are some key takeaways from the latest forex news and analysis for August 11, 2023:
– UK PPI rose more than expected in July, signaling persistent inflation pressures. GBP initially jumped before retreating.
– US PPI also came in hotter than forecast, maintaining Fed pressure to hike rates. USD/JPY rose back above 133.00.
– Falling oil prices on demand concerns weakened commodity currencies like AUD and NZD.
– Technical analysis shows EUR/USD grinding lower below 1.0300 with scope to retest parity at 1.0000.
– UK GDP and US retail sales data later this week will provide further insights into growth and inflation.
– Volatility and trading opportunities are likely this week with major economic releases on tap.
– Checking forex news daily allows traders to factor in macro fundamentals driving currency prices.
– Key data like inflation and GDP impact central bank policies and forex valuations.
– Technical analysis combined with news analysis provides an informed view on likely price action.
UK PPI Rises More than Expected in July
- The UK Producer Price Index (PPI) rose by 17.1% year-over-year in July, higher than the 16.4% increase expected.
- On a monthly basis, PPI rose by 0.1% compared to forecasts of a 0.2% decline.
- The data signals ongoing inflation pressures in the UK that may lead the Bank of England to continue raising interest rates.
- GBP/USD initially jumped on the hotter PPI before retreating. The currency pair trades just below 1.2150 ahead of the London open.
US PPI Also Shows Persistent Inflation
- The US PPI increased by 9.8% year-over-year in July, higher than the 8.8% rise expected.
- On a monthly basis, PPI rose 0.2% compared to forecasts of a 0.2% decline.
- The hotter than expected US PPI maintains pressure on the Fed to continue an aggressive series of rate hikes to combat inflation.
- USD/JPY rose back above 133.00 following the PPI beat. US Treasury yields also moved higher with the 10-year reaching 2.89%.
Crude Oil Prices Fall as Recession Fears Weigh
- Oil prices fell for a second day on renewed concerns that expected rate hikes to combat inflation will trigger an economic slowdown.
- Brent crude trades around $94 per barrel after reaching as high as $99 earlier in the week.
- Falling oil prices could provide some relief on inflation but may also be indicative of declining global growth.
- Commodity-linked currencies like AUD and NZD weakened amid the oil price drop.
Technical Analysis – EUR/USD Grinds Lower Below 1.0300
- EUR/USD continues to consolidate under the key 1.0300 round number support after briefly rising above it last week.
- With the longer-term trend still firmly bearish, breakdowns from the range lows could open up a retest of parity at 1.0000.
- Next major support sits around 0.9800 – the 2002 swing low. Look for a daily close under 1.0300 to confirm selling momentum.
Looking Ahead – UK GDP Data on Tap
- On Friday, traders will closely monitor UK Q2 GDP figures, forecast to show a contraction of 0.2% quarter-over-quarter.
- Weak UK growth combined with high inflation may make it difficult for the BoE to continue hiking rates aggressively.
- US retail sales data on Wednesday will also provide insight into the health of the US consumer.
- With key inflation and growth data on tap, it’s set to be an active week in the forex market. Expect potential volatility and trading opportunities.
Keeping up with the latest forex news ensures traders consider macro fundamentals driving currency price action. Check back here daily for the top forex news updates!