Foreign Exchange Market Flash News: USD under pressure

Foreign Exchange Market Flash News: USD under pressure due to surprising inflation rate figures
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  • Currency exchange

Inflation numbers trigger USD weakness and stock market rally?

The market has been waiting with great excitement for the latest inflation figures from the USA, and rightly so. Forecasts had expected a figure of 8%, but the inflation came in only at 7.7% year-on-year.

Implication: The Federal Reserve could hold off on further interest rate hikes

Market participants assumed a further tightening of monetary policy, these inflation figures now surprise. Why it is such a surprise is clear: usually the monetary policy and central bank measures arrive in the real economy with a time lag of 6-9 months. Clearly the afraids are now to set rates too high for too long.

The result was a big USD sell off, a NASDAQ that was up more than 7%, the biggest daily gain this year and rates are under pressure.

EUR/USD breaks through downward trend:
Foreign Exchange Market Update: graph showing USD under pressure

USD/CHF collapses by 6%:
Foreign Exchange Market Update: graph showing USD/CHF collapsing
Source: Tradingview

Conclusion for the Foreign Exchange Market

It is quite clear which economic indicator is currently the most important – inflation. Volatile markets are expected to continue, with central banks assuming an even more central role.

For more information on the foreign currency exchange market, please feel free to contact our forex experts! You can also check our live currency market overview.

Please note that this elaboration was completed on 14/11/2022 09:36 CET.
This article is for informational purposes only and does not take into account the particular circumstances of the readers. It does not constitute financial advice. The content of this article is not intended as an offer or solicitation to buy or sell any fx or to take any other action and are not intended to form the basis or part of any contract. Clients should seek independent professional advice and draw their own conclusions with respect to the suitability of the transaction, including its economic merits and risks.The information contained in this article is public data and has been obtained from sources believed by amnis to be reliable and accurate. Amnis Treasury Services AG makes no warranty or representation as to its correctness, accuracy or completeness for a particular purpose. Neither Amnis Treasury Services AG nor any of its employees shall be liable for any damages whatsoever arising out of the use of this article, its contents or otherwise.

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Gerhard Scharinger
Gerhard Scharinger is the Head Markets of amnis. He is an expert in Foreign Exchange, Treasury Management, Economics and Hedging. Besides various published articles and foreign exchange news he is also an international speaker at different events. Follow him and amnis on LinkedIn, Twitter and Facebook to keep up with the latest industry news and insights.
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