US dollar had a slight increase yesterday in a thin sales volume. Market is awaiting for the United States CPI data for this November and the Fed Interest Rate decision on the next day.
Market is still hoping that Federal Reserve will slow down its interest rate hike speed that will be announced on Thursday. The November consumers inflation data will be announced as soon as possible.
Many analysts predicted that the yeah on year CPI in November will decline to become 7.3% from 7.7%. Mean while, the month over month data is predicted lower as well.
That will be from 0.4% to become 0.3%. At the other side, the November month over month core CPI may not move or stay at the lebel of 3 percent.
Euro was 0.05 Percent Stronger
Elsewhere, Euro was closed 0.05 percdnt higher than before. It means that currency was at the level of 1.05382 yesterday. Euro was successfully higher at around 8% in the last quarter this year.
That European currency was stronger because market believed that European central bank will take an aggresive movement in raising the interest rate. Meanwhile, the USD index was also slightly increasing.
It was for about 0.2% higher and then closed around the area of 104.89 yesterday. This dollar weakening was a sign of market that see a declining inflation.
Besides that, it seems that they are still based on everyting on Powell’s statement who said that federal reserve will decrease the speed on interest rate hike. This was said by Joe Perry, a senior analyst In City Index New York.
Macro Economic Data was Solid This Week
This week was quite full of the macro economic data. It is where four world central banks will schedule their last monetary policy meeting this year or in 2022.
European Central Bank, Federal Reserve, and Switzerland National bank will announce their rate at the same day. The Fed is predicted to make 50 basis point increase.
That was after the sequence of aggresive 75 basis point hike before. Elsewhere, Gold prices were still holding at $1,808 an ounce in wednesday (14/December) evening trading session.
The Spot gold prices were in the range of $1,807.77 per ounce. Meanwhile, the gold futures prices were at $1,820.10, down 0.3% from the previous position.
The US CPI Grew by 0.1%
The XAU/USD occupied the position of $1,809.57, after a gain of more than 1% in yesterday's trading session. The US CPI on a monthly basis grew only 0.1%, below the forecast of 0.4%.
The Core inflation was also lower at 0.2% compared to 0.3% expectations. This Lower Than expected United States CPI inflation data catapulted gold prices yesterday.
Moments after the release of the data, that precious metal prices even jumped up to 2.4% to a five month high. The USD sprawled to a low six months after the release of the data.
It became an additional factor to the appeal of gold today. Even if the prices appear to slip slightly then it is just a profit-taking action after yesterday's big rally.
Dovish Statement will Supports the Gold
The Analyst Craig Erlam of OANDA said there is growing confidence in the Fed ending rate hikes after cooling America's inflation. The market is just waiting for the US central bank to agree.
If the Fed gives a dovish tone today (in the FOMC meeting), then people will see gold prices shoot above $1,810. This commodity may score its best rally of the year.
Meanwhile, according to Michael Langford of AirGuide, the Fed must have seen for itself the US CPI data yesterday. However, they are unlikely to change their interest rate policy just like that or in the short term.
The market will wait for the statement of Chairman Jerome Powell in the post-meeting press conference. The Fed is scheduled to announce its monetary policy early Thursday morning.
