Marc Chandler, Managing Partner at Bannockburn Global ForEx and Editor of the Marc To Market website, joins us to recap the corrective moves seen in most markets as a result of the hotter than expected CPI inflation reading, and expectations that the Fed will keep hiking rates longer and higher than initially expected.
Next we review the recent rebound in the US Dollar and move higher in interest rates off the back of this persistently high inflation news, that caught many traders wrong-footed. Even though other central banks are also starting to tighten, like the ECB last week and the Bank of England and Bank of Japan for next week, they are not moving as aggressively as the Fed, and so Marc sees room for the US dollar to run up to 117.50 – 120 before completing its bullish run higher. We wrap up looking forward to the next Fed rate hike next week, and after that the only data that is really going to move the needle is further inflation metrics.