By Peter Nurse
Investing.com – The dollar gains positions at the beginning of the trading day in Europe this Wednesday, awaiting the publication of inflation data for producer prices from both the United States and China, which weighs down confidence in the risk, and investors being aware that inflation in consumer prices in the United States —data published in the course of this day— is also close to a 30-year high.
At 8:55 a.m. (CET), the, which follows the evolution of this currency against a basket of six other major currencies, rises 0.2% to 94.130, still far from Friday’s highs of 94.645, its highest point in more than a year.
The pair fell 0.2% to the level of 1.1568, it rose 0.2% to 113.09, still not far removed from Tuesday’s lows of 112.73, a level last seen on the 11th. October. The falls to 1.3553, and the, very sensitive to risk, falls 0.2% to the level of 0.7360.
The dollar, which is a safe haven, has benefited from risk aversion as global stocks have slipped from record levels. Additionally, fears of possible contagion from Chinese housing market concerns are mounting after developer Fantasia Holdings warned on Wednesday that it might not be able to meet its debt obligations.
The largest developer in the country, China Evergrande (HK 🙂 Group, also faces its biggest solvency test to date this Wednesday: the payment of coupons worth more than 148 million dollars in three dollar bonds.
That said, attention will turn today to the release of US October consumer price index data, especially after the country’s ex-factory prices remained high on Tuesday. This has reminded the market that inflation remains a hot topic, as the Federal Reserve has not yet decided when to start raising interest rates as the economy recovers.
Economists forecast that the general index of the CPI for October will rise 0.4% for the month as a whole, which represents an acceleration compared to the rise of 0.2% the previous month, and that the underlying index will rise 0 , 4% to 4.3%, well above the average annual inflation target set at 2% by the Federal Reserve.
The Federal Reserve insisted at its recent monetary policy meeting that it is still too early to raise rates, a view supported this week by people like San Francisco Fed Chair Mary Daly and Minneapolis Fed Chairman. , Neel Kashkari.
By contrast, St. Louis Fed Chairman James Bullard took a more aggressive stance, speaking of two rate hikes in 2022.
“If inflation is more persistent than we now think, I think we will have to take action a little earlier to keep inflation under control,” Bullard said Monday in an interview with Fox Business Network.
Separately, the pair rose to the 6.3935 level after data from China showed that the country’s peaks of 26 years in October.