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The greenback stabilized on Friday after the release of red-hot inflation which pumped up expectations of an aggressive tightening by the Fed from an 80.4% expectations rate last week to 98.1% this week. The pound was weighed down by speculations that the UK Government may abandon the tax cut plan. UK Prime Minister Liz Truss is set to speak at 2 pm London time at a conference.
The USDJPY pair rallied by +0.35% on Friday as investors digested stronger than-anticipated US inflation data printed on Thursday. Inflation in the US unexpectedly rose to 0.4% in September from 0.1% the previous month. On a yearly basis, inflation rose to 8.2% beating expectations of 8.1%. The pair breached a 24-year high at 147.50 and set new targets at 148.00 and 150.00. Market participants shift their focus to US Retail Sales, Michigan Consumer Sentiment and US Baker Hughes Oil Rig Count due in the New York session.
EURNZD slumped by -0.27% following a slowdown in eurozone inflation data. France saw a decline in inflation with the monthly figures dropping to -0.6% from -0.5% expected while the Spanish YoY inflation dropped to 8.9% in September from 9.0% in August. Moving on, New Zealand’s inflation data for the 3rd quarter will be due next week and is expected to be less than the previous quarter. Bulls lost their steam at the 1.7350 intraday high and bear may be seen retesting 1.7190 and 1.7000 on an extended slide.
The pound lost -0.52% against the AUD pressured by reports that the UK Government may cancel the massive unfunded tax cut plan. The Chinese CPI data came in at 0.3% which is 0.1% less than previously while the Producer Price Index dropped to 0.9% from the 1.0% expected. This, however, failed to weigh the Australian dollar against the pound. The pair is currently capped by 1.1365 immediate resistance and 1.1500. The pair’s bears may reclaim 1.1180 if 1.1225 fails to hold.
European stocks traded higher in the European session to end the week. The FTSE100 surged by +0.78% after sweeping below 6750, a low last seen in April of 2021. France 40 gained +0.60% trading a few pips away from 6000 psychological resistance. German 40 trimmed its losses by +0.34% after dropping from 12625 to 12400.
US stock futures rose after the country’s largest banks posted bigger earnings for the third quarter. Dow Jones Industrial Average Index futures were up +0.24% trading between 30280 and 29900. The tech-heavy Nasdaq futures gained +0.08% from 10 950 and bulls are capped by 11140. The S&P 500 futures were flat at +0.05% after bulls got rejected at the 6700 resistance.
In cryptocurrency, bitcoin rallied on Friday in the aftermath of higher-than-expected US inflation data. The CPI data was less than previous but more than anticipated which may give the Fed another reason to go big on their next policy meeting. BTCUSD gained +1.73% on the day but still capped by 20500 and 22800 to the upside. An aggressive move by the Fed may dip the crypto down to 14000 and then 10000.
