EURUSD On a Freefall to The Level of 1.05 After Hot US CPI – Will This Trend Sustain?

Last night (Australian time) at 10:30 pm, a highly anticipated economic indicator was released from the United States: Retail Sales and Core Retail Sales MoM. Market expectations hovered around 0.3%, following the previous month's 0.9% reading.

Last night (Australian time) at 10:30 pm, a highly anticipated economic indicator was released from the United States: Retail Sales and Core Retail Sales MoM. Market expectations hovered around 0.3%, following the previous month's 0.9% reading. However, the actual figures diverged significantly from forecasts, with a robust 0.7% increase. This unexpected outcome further bolstered the USD, propelling it from 105.900 to its current position at 106.297. It underscores the enduring strength of the American economy, despite other critical data pointing to elevated and seemingly uncontrollable inflation.

In reaction to this news, the EURUSD experienced a slight fluctuation, but as the Asian session unfolds, we witness heightened volatility in the currency pair, as anticipated. As mentioned in my analysis yesterday, we can expect the EURUSD to approach levels around 1.05 in the coming weeks or months, contingent upon market volatility. 

EURUSD Daily Chart 

 Source: Finlogix ChartsLooking ahead to tomorrow (Wednesday, April 17, 2024), we anticipate market data from the European region concerning the country's inflation over a specified period. This data, encompassing YoY and MoM metrics, holds significance for the EUR's strength. A rise in inflation would likely bolster the EUR and potentially trigger a retracement in price. Conversely, market participants anticipate a slight dip in inflation. Personally, I lean towards a downward bias in the risk assessment.

US Retail Sales 

 Source: Finlogix Economic CalendarMarch’s hot US CPI print has led to Fed rate cut expectations being dialled back considerably in anticipation that strong US economic performance will now keep inflation higher for longer. The net upshot of this has been a further weakening of the yen against the greenback, with USD/JPY climbing beyond its recent peak to around 153. The Ministry of Finance (MoF) has been quick to voice its concern, with Vice Finance Minister for International Affairs Masato Kanda yesterday characterizing recent exchange rate movements as “rapid” and declaring that “We’d like to respond appropriately to excessive moves, without ruling out any options” (Reuters).

A July hike is possible should inflation data surprise. That said, with Japan’s economy already running at full employment, increases in aggregate demand and/or yen depreciation now have obvious potential to generate additional upward pressure on prices. Persistent US inflation has owed much to the strength of US aggregate demand, which, clearly, is also relevant to the outlook for the Japanese economy. Moreover, the BoJ’s views on domestic inflation should be affected if the prospect of Fed rate cuts continues to recede and the yen is expected to remain weak as a result. We thus see potential for the next rate hike to be brought forward if such inflationary changes in external conditions are accompanied by strong domestic CPI data in the next few months. In particular, the BoJ will be looking for evidence that this spring’s sizable wage hikes are pushing up services prices. A July rate hike might start to look more likely if the Tokyo CPI print for April (due on the second day of the BoJ’s meeting on 25-26 April) comes in higher than +0.2% m/m.

Insights Inspired by BNP Paribas (BOJ RISK): Credit to Their Analysis for Shaping Some Aspects of This Text

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.

规则: ASIC (Australia), FSCA (South Africa)
read more
Central Bank Outlook and Trade Shift Sentiment | 8th July, 2025

Central Bank Outlook and Trade Shift Sentiment | 8th July, 2025

On July 8, gold slips below $3,350 as risk appetite improves. Silver holds steady near $36.90, while AUD/USD rises to 0.6855 ahead of the RBA decision. USD/JPY surges above 161.00 as BoJ tightening bets fade. PBOC sets USD/CNY at 7.1534, signaling stability. Focus now shifts to US CPI, central bank guidance, and trade progress for market direction.
Moneta Markets | 55分钟前
ATFX Market Outlook 8th July 2025

ATFX Market Outlook 8th July 2025

U.S. President Trump signed an order delaying “reciprocal” tariffs from July 9 to August 1 and warned of steep hikes from that date, escalating trade tensions. U.S. stocks closed sharply lower, with the Dow down 0.94%, the S&P 500 falling 0.79%, and the Nasdaq dropping 0.92%. Tesla also tumbled after Elon Musk announced plans to launch a new political party.
ATFX | 3小时27分钟前
Yen Weakens as Japanese Data Sends Mixed Signals

Yen Weakens as Japanese Data Sends Mixed Signals

The USD/JPY pair edged higher on Monday, reaching 144.81, as the yen relinquished its earlier gains. The currency faced downward pressure following the release of disappointing wage figures, which dampened expectations for further monetary policy tightening by the Bank of Japan.
RoboForex | 21小时6分钟前
Gold Struggles for Direction as Risk Mood Sours | 7th July, 2025

Gold Struggles for Direction as Risk Mood Sours | 7th July, 2025

On July 7, gold slips below $3,350 as the USD strengthens and traders take profit amid tariff-related jitters. Silver lingers under $37. EUR/USD and NZD/USD retreat on weak sentiment, while USD/CAD rises above 1.3900 as oil weakens. Markets brace for key data including US CPI and Eurozone retail sales, with Fed speeches also in focus.
Moneta Markets | 1天前
ATFX Market Outlook 7th July 2025

ATFX Market Outlook 7th July 2025

U.S. dollar weakened against major currencies after President Trump’s landmark tax cut bill was passed, amid mounting pressure on countries to strike trade deals with Washington. As markets brace for the July 9 tariff deadline—targeting countries like Japan that have yet to reach agreements—the dollar index slipped 0.1% to 96.92.
ATFX | 1天前
ATFX Market Outlook 4th July 2025

ATFX Market Outlook 4th July 2025

The U.S. economy added 147,000 jobs in June, beating expectations of 110,000, while the unemployment rate fell to 4.1%. Traders are now betting that the Fed is unlikely to cut rates before September. Meanwhile, the House narrowly passed Trump's major fiscal bill by a vote of 218 to 214. U.S. stocks rallied on Thursday, hitting fresh record highs.
ATFX | 4天前
Rate Shifts Steer FX Markets as Silver Holds Strong

Rate Shifts Steer FX Markets as Silver Holds Strong

On July 3, silver stays firm above $35.40 as Fed cut bets persist. EUR/USD holds near 1.1800, while GBP/USD lingers near 1.3585 ahead of UK jobs data. JPY strengthens after BoJ signals a hawkish pause. AUD/USD slips on weak trade surplus. Focus turns to US NFP and ISM data for market direction before the US holiday break.
Moneta Markets | 4天前
ATFX Market Outlook 3rd July 2025

ATFX Market Outlook 3rd July 2025

Wednesday’s ADP report showed a surprise decline of 33,000 private-sector jobs in June, marking the first contraction since March 2023 as economic uncertainty weighed on hiring. U.S. equities surged, with the S&P 500 and Nasdaq closing at record highs, driven by gains in tech stocks and relief following the U.S.–Vietnam trade agreement, which eased concerns over prolonged trade tensions
ATFX | 5天前