Traders Eye High Inflation Headlines, USD Bulls Spurred

September 14, 2022 10:14

Forex traders and stock market investors are eyeing high inflation headlines that spurred USD bulls and spiked the Dollar Index.

Higher-than-expected core inflation in the US sparked fears that high prices are becoming entrenched in the economy and added to the likelihood of a hawkish reaction from the Federal Reserve when it meets next week.

In more USD-related news, Retail Sales figures for August are set for release tomorrow. US Retail Sales growth is expected to stay unchanged at 0 percent on a monthly basis in the context of high inflation and consumer wariness as borrowing costs rise. As market participants are highly sensitive to price and consumer behaviour at the time of writing, anything unexpected in the final results could move the USD currency pairs.

On an annual basis, inflation in the UK trimmed to 9.9 percent in August from 10.1 percent previously, according to statistics released this morning. The GBP remains under pressure from a strong USD.

In Australasian trading news, New Zealand will release its second-quarter Gross Domestic Product (GDP) results tomorrow, September 15. The economy is expected to have grown to 1 percent compared to minus 0.2 percent in the first quarter. If the actual results disappoint on a quarterly basis and the economy shrank instead of growing, there could be a knock-on effect on the NZD. On an annual basis, the consensus is for New Zealand’s economy to have declined from 1.2 percent to 0.2 percent in the second quarter.

Australia’s Unemployment Rate for August is due out on Thursday and the benchmark is expected to have remained at the level of 3.4 percent, the lowest in 48 years.

Lastly for the red-flagged trading events this week, China’s Retail Sales figures for August are due out on Friday, September 16. Retail sales are expected to have risen to 3.6 percent from 2.7 percent in July, and if there are surprises in the results, market participants could react and move the CNY currency crosses.

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

Sarah Fenwick
Sarah Fenwick Financial Writer, Admirals London

Sarah Fenwick's background is in journalism and mass communications. She has worked as a correspondent covering Swiss Stock Exchange news and written about finance and economics for 15 years.