Here’s what you need to know on Wednesday, July 16:
Sterling gains adhesion in European morning on Wednesday and American dollar (USD) Index moves away from a high level of high level, which he determined on Tuesday. The economic calendar in the USA will contain inflationary data of producers in June together with the data of industrial production, and several decision -makers of the Federal Reserve (FED) will give speeches later. Finally, Fed will publish its beige book.
The price of an American dollar this week
The table below shows a percentage change in the US dollar (USD) compared to the main currencies this week. The American dollar was the strongest to Japanese yen.
| USD | EUR | GBP | JPy | BOOR | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.37% | 0.62% | 0.97% | 0.06% | 0.57% | 0.84% | 0.37% | |
| EUR | -0.37% | 0.23% | 0.59% | -0.32% | 0.19% | 0.46% | -0.01% | |
| GBP | -0.62% | -0.23% | 0.30% | -0.55% | -0.04% | 0.23% | -0.10% | |
| JPy | -0.97% | -0.59% | -0.30% | -0.77% | -0.39% | -0.06% | -0.53% | |
| BOOR | -0.06% | 0.32% | 0.55% | 0.77% | 0.50% | 0.78% | 0.31% | |
| Aud | -0.57% | -0.19% | 0.04% | 0.39% | -0.50% | 0.25% | -0.19% | |
| NZD | -0.84% | -0.46% | -0.23% | 0.06% | -0.78% | -0.25% | -0.48% | |
| CHF | -0.37% | 0.00% | 0.10% | 0.53% | -0.31% | 0.19% | 0.48% |
The heat map shows percentage changes in the main currencies towards each other. The basic currency is collected from the left, and the quote currency is collected from the upper order. For example, if you choose an American dollar on the left column and move along the horizontal line to Japanese Jen, the percentage shift displayed in the field will represent USD (base)/JPy (quote).
The UK national statistics office announced early Wednesday that annual inflation in Great Britain, measured by changing the consumer price rate (CPI), increased to 3.6% in June from 3.4% in May. This reading exceeded market expectations of 3.4%. Every year, the basic CPI increased by 3.7%, compared to the estimation of 3.5%analysts. After closing the first two days of the week, deeply on a negative territory, GBP/USD Stages reflection and trades slightly higher days above 1.3400 in European morning.
On Tuesday, US data showed that the annual CPI inflation increased to 2.7% in June from 2.4% in May. During this period, the basic CPI increased by 2.9% after an escalate of 2.8% registered last month. The USD index collected a stubborn rush and increased to the highest level for over three weeks near 98.70. Early Wednesday the USD index corrects lower and fluctuates at around 98.50. US President Donald Trump said at the end on Tuesday that letters notifying smaller countries about their tariff rates in the US would soon come out, and explained that his administration would probably designate the “slightly over 10%” tariff for these countries. After a mixed campaign observed in Wall Street on Tuesday, Futures in the stock index fell by about 0.3% early Wednesday.
After Monday’s subdued action, EUR/USD He turned south and fell below 1,1600 for the first time from June 24. The couple improves in European morning on Wednesday and trade near 1.1620. Eurostat will publish trade balance data for May later in the session.
After losing about 0.5% on Tuesday, Aud/USD It maintains its ground and trades conveniently above 0.6500. During the Asian session on Thursday, Australian labor market data in June will be carefully observed by a market participant.
After Tuesday’s rally, USD/JPY He was promoted to the highest level from the beginning of April above 149.00 in the Asian session on Wednesday. A pair of edges lower in European morning and trads above 148.50.
Gold Closed on a negative territory on the second day in a row on Tuesday. Early Wednesday Xau/USD recovers and trades around USD 3340.
Frequently asked inflation questions
Inflation measures the escalate in the price of a representative basket of goods and services. Header inflation is usually expressed as a percentage change based on month to month (Mom) and year on year (Yoy). Basic inflation excludes more unstable elements such as food and fuel, which can change because of geopolitical and seasonal factors. Basic inflation is the number of economists focus on the level of central banks, which are authorized to maintain inflation at a management level, usually about 2%.
The consumer price indicator (CPI) measures the change in the prices of the basket of goods and services over time. This is usually expressed as a percentage change on the basis of month to month (Mom) and year on year (Yoy). Core CPI is a number directed by central banks because it excludes unstable food and fuel cartridges. When Core CPI increases above 2%, it usually causes higher interest rates and vice versa when it drops below 2%. Because higher interest rates are positive for currency, higher inflation usually causes a stronger currency. On the contrary, it is true when inflation falls.
Although this may seem contrary to intuition, high inflation in the country increases the value of its currency and vice versa for lower inflation. This is due to the fact that the central bank usually raises interest rates to combat higher inflation, which attracts more global influx of capital than investors looking for a lucrative place to park their money.
Earlier, gold was investors of assets, to which he turned to high inflation, because it retained its value, and although investors often buy gold for his unthreatening real estate in times of extreme market riots, this is not the most of the time. This is because when inflation is high, central banks set interest rates to combat it. Higher interest rates are negative in the case of gold because they escalate the costs of having gold in relation to assets on interest or place money on the cash deposit account. On the other hand, lower inflation is positive for gold because it lowers interest rates, thanks to which glowing metal is a more profitable investment alternative.
