Key Economic Data and Forex Analysis for October 1

Market Overview

After a volatile day in financial markets, investors are turning their focus to key macroeconomic data releases as the fourth quarter kicks off. Eurostat is set to publish the Harmonized Index of Consumer Prices (HICP), the European Central Bank’s preferred measure of inflation. Meanwhile, in the US, the ISM Manufacturing PMI for September and JOLTS Job Openings data for August will be in the spotlight. Additionally, several Federal Reserve policymakers will be delivering speeches today.

US Dollar Price Movement This Week

US Dollar Index Performance

The table below shows the percentage change of the US Dollar (USD) against major currencies this week. Notably, the USD showed strength against the Japanese Yen.

• USD:
  • EUR: +0.28%
  • GBP: -0.06%
  • JPY: +1.52%
  • CAD: +0.06%
  • AUD: -0.34%
  • NZD: +0.08%
  • CHF: +0.67%
    

    Market Analysis
    

• Fed Chairman Jerome Powell indicated that the Fed is not rushing to cut rates quickly, emphasizing data-driven decisions. The USD Index closed the third quarter on a positive note, hovering below 101.00 early Tuesday.
• EUR/USD: After testing 1.1200, the pair retreated in the American session. Expectations for Eurozone core HICP inflation to remain at 2.8% in September.
• GBP/USD: Trading sideways below 1.3400 as the week begins.
• USD/JPY: BoJ maintains accommodative stance but will adjust policy if economic conditions improve. The pair climbs over 0.5% to around 104.50.
• Gold: Corrected downwards post-Friday decline, currently holding above $2,640.
• AUD/USD: Australian Retail Sales up 0.7% in August, while Building Permits declined by 6.1%. The pair trades slightly higher above 0.6900.
  

  Inflation FAQs
  

  What is Inflation?
  

  Inflation measures the rise in the price of goods and services. Core inflation excludes volatile elements like food and fuel. Targeted around 2% by central banks.

  Consumer Price Index (CPI)
  

  Measures price changes of a basket of goods and services. Core CPI, excluding food and fuel, is crucial for central banks. Higher inflation usually leads to a stronger currency.

  Impact of Inflation on Currency
  

  High inflation can increase the value of a currency due to raised interest rates by central banks, attracting global capital inflows.

  Gold and Inflation
  

  Gold was historically sought during high inflation, but higher interest rates associated with inflation can be negative for Gold as it increases the opportunity cost of holding the metal.

  This comprehensive analysis provides insights into the current market trends and economic data, empowering investors and individuals to make informed decisions regarding their financial portfolios and future strategies. By understanding key concepts like inflation and currency movements, readers can navigate the complex world of finance with confidence and clarity.