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The yellow metal continued to explode higher this week as weakness in the US dollar was further exacerbated by soft data.
Earlier in the week, US CPI for May came in lower than projected at 1.8% vs 1.9% expected on the headline reading and 2% vs 2.1% expected on the core reading. The data comes on the back of comments from Jerome Powell.
The Fed Chair warned the market last week that the Fed stood ready to act as necessary to backstop the economy should the negative impact from Trump’s escalating trade war start to weaken activity.
Other Fed members have echoed Powell’s comments. Recently, St Louis Fed President James Bullard said that a rate cut “may be warranted soon”. Even Chicago Fed president Charles Evans highlighted that “solid fundamentals” in the US have said that the Fed should alter its policy approach “if that’s necessary”.
Recent data has taken a turn lower in the US. The manufacturing PM hit a 10-year low last month. This fuelled fresh concerns over th...
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