Forex Today: Higher US Inflation Boosts Dollar and Yen

Another release of higher-than-expected US inflation data boosts risk-off assets in markets.

• US inflation data released yesterday showed US inflation running at an annualized rate of 6.2%, the highest rate seen in 31 years. The news initially boosted precious metals and major cryptocurrencies, but now seems to have had a more lasting effect in knocking stocks, bonds, and boosting the U.S. dollar and Japanese yen.

• In the Forex market, the Japanese yen and the US dollar are the strongest major currencies, while almost all the other major currencies are weak. This can give Forex traders an opportunity to trade in line with the long-term bullish US dollar trend.

• The EUR/USD currency pair closed yesterday below $1.1500 on an unusually strong bearish movement. The odds are in favour of lower prices in this currency pair today and over the coming days, so there may be a short trade opportunity here.

• The price of wheat closed yesterday at a new 4-year high. We may be seeing the start of a strong period for some agricultural commodities.

• The price of gold closed yesterday at a new 4-month high well above the former zone of resistance at $1830 but the price may need some time to consolidate before making a more sustained advance.

• Australian unemployment data came in much worse than had been expected. The Australian unemployment rate now sits at 5.2%, higher than the 4.8% which had been expected.

• It is a public holiday in the US and Canada today, but only government bond markets will be closed.

• Last week saw the third consecutive global weekly rise in new confirmed coronavirus cases after two months in which cases fell steadily.

• It is estimated that 51.3% of the worlds population has received at least one dose of a coronavirus vaccination.

• Total confirmed new coronavirus cases worldwide stand at over 252.1 million with an average case fatality rate of 2.02%.

• The rate of new coronavirus infections appears to now be increasing most quickly in Austria, Azerbaijan, Belgium, Chile, Croatia, Cyprus, the Czech Republic, Denmark, the Dominican Republic, Egypt, Finland, Georgia, Germany, Greece, Hungary, Iceland, Jordan, South Korea, Laos, Luxembourg, Mauritius, Montenegro, Netherlands, New Zealand, North Macedonia, Norway, Poland, Russia, Slovakia, Slovenia, Switzerland, Trinidad, and Vietnam.