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The decline in US CPI has driven a strong rebound in gold, putting pressure on the US dollar as major currencies rise
forex7 months before
Summary：The latest US CPI data is lower than market expectations, further cooling down market expectations for the Federal Reserve's interest rate hike. Affected by this, the international gold price jumped to the $2400 mark, the US dollar index fell, and major currencies such as the euro and pound rebounded in unison. Experts suggest paying attention to the Federal Reserve's interest rate signals and changes in hedging demand, and flexibly grasping the gold and foreign exchange market trends.
This week, global financial markets are focusing on the latest inflation data from the United States. The year-on-year growth rate of the US CPI announced on Wednesday fell to a nearly one-year low, strengthening expectations that the Federal Reserve will temporarily postpone or even consider interest rate cuts. The US dollar index fell in response, hitting a new low in nearly two months, driving major currencies such as the euro, pound, and Australian dollar to rise sharply.
The demand for safe haven has once again risen, and the international spot gold price has broken through $2400, reaching a historic high. Multiple central banks have increased their holdings of gold reserves, and market funds continue to flow into precious metal ETFs and gold futures. Analysts point out that the combination of falling inflation and geopolitical risk resonance gives gold a dual upward momentum.
In terms of the foreign exchange market, both the US dollar against the Japanese yen and the euro against the US dollar have broken their stage highs. The yield on US Treasury bonds has declined, and funds have flowed into non US markets and commodity currencies. Experts believe that as the Federal Reserve's policy direction changes and market risk appetite increases, gold and major currencies may usher in a new round of structural market trends.
The lower than expected US CPI data not only enhances the safe haven appeal of gold, but also accelerates the pace of the US dollar's correction. Faced with the complex and ever-changing global financial environment, it is recommended that investors closely monitor the Federal Reserve's interest rate movements and the global geopolitical situation, and moderately increase their allocation of precious metals and high-quality foreign currency assets to enhance the stability and risk resistance of their investment portfolios.
Author: Mark Furman
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