Euro/Dollar
The exchange rate of the currency pair continues its downward movement, reaching the level of 1.1321. If such dynamics are maintained, the next support can be expected at the level of 1.1275.
The yield on US bonds is moving towards a recent high and is now at 1.854%.
At the beginning of the trading environment, there was a slight decline in the dollar, after which it strengthened.
Rising inflation and the expectation of tough measures by the Fed to contain it remain on the agenda. There is also ongoing talk about an interest rate hike in March. Short-term futures on the foreign exchange market have to take into account all the existing risks.
Today it is expected to publish information on changes in the number of applications for unemployment benefits, the index of production activity of the Philadelphia Federal Reserve and the situation in the secondary real estate market.
Pound/Dollar
The pound fell against the dollar, reaching 1.3609. Active sales will lead the currency pair to the next level of 1.3573.
The yield on UK bonds is close to the maximum in January 2018 and is at 1.2595%.
Debt securities of England are following an upward trend, as are German bonds, which in 2019 for the first time traded above 0% against the background of the highest inflation rate in the last 30 years.
Christian Lindner, the new German finance minister, called for increased fiscal stimulus in the Eurozone and the introduction of effective restrictions on government loans. These measures are necessary to control the situation on the market, after the reduction of support for the bond market by the European Central Bank.
According to statistics, consumer prices rose by 0.5% in December and these figures are significantly higher than predicted. This situation affected the increase in the annual consumer price index (CPI) to 4.2%, and the base – to 5.3%.
The week ended with an increase in trading activity in currency pairs with the presence of the pound. Today, attention is focused on the consumer price index, retail sales and consumer confidence.
Gold
Gold broke through the support level of $1,830 per ounce. The banking metal continues to react to the dollar exchange rate, and is also sensitive to the existing risks of increased inflation. A new wave of growth is likely to have a positive impact on the currency and open up the prospect of reaching a new level of 1876.
The trading environment ended with a fall in the US stock market, due to negative dynamics from the financial, consumer services and technology sectors. The Dow Jones declined by 0.96%, the S&P 500 index fell by 0.97%.
Risks of increased inflation remain. In Canada, in December 2021, consumer prices increased by 4.8%, compared to the same month in 2020. Such figures were predicted by experts. Annual inflation was 4%. A new wave of growth will only increase interest in assets such as bitcoin and gold.
Cryptocurrencies
Bitcoin maintains a downtrend and is currently at the level of 41825. The trading activity of digital gold is strongly influenced by the growth of inflation.
According to the results of Wednesday, the capitalization of the cryptocurrency market amounted to 1.97 trillion dollars, as on Tuesday.
According to Arcane Research, the correlation of the bitcoin exchange rate and the S&P 500 index has peaked since October 2020. And bitcoin's trading activity has fallen to its lowest level since July last year.
Over the past month, the digital currency has become cheaper by 10%, reducing the capitalization to $ 795 billion. Despite the fact that in November last year, the value of bitcoin reached a historic high of $69 thousand.