Last week, the USD saw its worst run in days as markets awaited client inflation data. Last Tuesday (September 13, 2022), customer prices rose more than expected, by 8.3% year on year in August; the news sparked a sell-off. EURUSD fell 1% and BTCUSD lost 4% as bulls battle to defend support at $21,000.
Higher inflation means the Fed isn’t done with rate hikes yet. Cheap money will not return to the financial markets soon.
The Labor Department said the CPI rose 0.1%, while analysts expected a decline of 0.1%. It may not seem like very much, but that’s the fragility of the markets in the second half of 2022.
The US dollar has gained in recent months. A weaker dollar drove cryptocurrencies and stocks higher. Meanwhile, oil prices have fallen as the war in Ukraine appears to be changing course with a successful Defenders offensive pushing back Russian forces.
However, optimism is still under threat as another armed conflict has just started with Azerbaijan attacking Armenia in the disputed region of Nagorno-Karabakh. The Russian Federation has traditionally supported Armenia, and it seems that Azerbaijan has decided to take advantage of Moscow’s prolonged involvement in the invasion of Ukraine.
What does rising inflation mean?
We have observed a unique situation in recent months. It was the USD against all other currencies and asset classes. Market sentiment is swinging with excitement as stocks and crypto have bottomed out. If inflation stays high and interest rates need to stay high, it could choke the economy.
The US dollar has been on a losing streak for the past few days. This has many people wondering what is causing this decline and what it means for them and their wallets.
One of the most frequently cited reasons for the recent decline in the US dollar is concern over the US economy and its outlook. Other factors have been implicated, including rising interest rates in various countries and trade tensions between the United States and its partners.
People all over the world face the challenge of protecting their money against inflation. For years they have been investing in stocks and cryptocurrencies. They now face a double threat: inflation and falling asset prices. The only way out is to actively trade. Apps like SimpleFX aim to let you profit whenever the price of bitcoin, gold, USD, Tesla, or other symbols goes up or down. Well-timed trades can help you multiply your funds, while negative balance protection and adjustable leverage allow traders to diversify risk and earn a stable return on their capital. Try SimpleFX now.
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