FX.co ★ Strong inflation data in the States will support the dollar

On world markets, there was a pause after the growth in the last two days of the demand for risky assets. They received support on the wave of hopes that the trade war between the States and China would grow into a full-scale economic conflict.

On Wednesday, the activity in the markets decreased. Investors are waiting for news from the US and Russia on Syria. If the US continues to increase tensions, it can lead to a military conflict between them. But at the same time, there is a hope that it will not come to this and the countries will stop at the "red line". In this case, we should expect a reversal of the price of crude oil, which soared in the last two days, precisely because of increased tensions in the Middle East. If the tension factor around Syria decreases, then the markets will remember about customs disputes between America and China, which will negatively affect prices. Another reason for the decline could be the publication of data from the US Department of Energy, if the reserves of crude oil grow. Already today, the increase in oil prices stopped in the morning due to the publication of data from the American Petroleum Institute (API), which showed an increase in oil stocks last week by 1.8 million barrels.

Today, the attention of market players will also be focused on the publication of figures on consumer inflation in the US. According to the forecast, it is assumed that the consumer price index (CPI) in annual terms will add 2.4%. A year ago, its growth was 2.2%. In March, there is no growth. The base value of the consumer price index (CPI) on an annual basis should grow by 2.1% against 1.8%. It is also forecasted that by the end of the last month, the figure will grow by 0.2%, as well as in February. If inflation data does not disappoint, then this will be a serious signal for the Fed, indicating that inflationary pressures are intensifying, which means that the Fed may become more active in the matter of raising interest rates.

By the way, the data on production inflation released on Tuesday have already demonstrated an increase in the growth dynamics.

It is likely that today, on the wave of positive data, the US dollar may receive appreciable support, and the local share market will decrease. This can indeed happen, despite the fact that all the attention of the markets is focused on the events around Syria, as well as the US trade war with China.

Forecast of the day:

The currency pair EUR / USD reached a local maximum of 1.2385. It can turn down and fall to 1.2300 amid strong data on consumer inflation in America.

The USD / CAD currency pair found support at 1.2590. It could turn up and rise to 1.2675 amid positive news for the US dollar from the US, as well as a possible correction of crude oil prices.