Dollar continues to suffer; stocks rocket higher
31 August 2021
Another day, another record high in US stock markets, pushing the SP500 index above 4,540 USD and the Nasdaq 100 index toward 15,700 USD.
The US dollar is still dropping after the Federal Reserve Chair Jerome Powell declined on Friday to offer a firm signal on when the central bank plans to start the tapering process, surprising many in the market who had been looking for a specific timetable.
At the time of writing, the EURUSD pair was 0.3% higher, trading at three-week highs at around 1.1825 and confirming the large falling wedge pattern on the daily chart, possibly leading to further gains.
From other news, the German unemployment rate ticked lower marginally to 5.5% in August, while the unemployment change also improved, from -90,000 to -53,000. The euro has been supported by these data as well.
Later in the session, the EU CPI data are due, and the year-on-year inflation is expected to accelerate to 2.7% from 2.2%, way above the ECB official target. Moreover, the core inflation is seen more than doubling, from 0.7% to 1.5%.
Canadian GDP data will be released during the US session, most likely influencing the USDCAD pair, while the US calendar is empty, offering only housing price indices.