Dollar drops, gold rises after inflation data By

© Reuters. – Global inflation is expected to rise with the additional costs created by the food-related pandemic as food prices around the world have reached their peak in recent years. The same expectation is also valid for the USA and the expectation that inflation will experience a rapid rise caused a steepening in the yield curve, and the bond interest rates also increased. Recently, bond yields showed rising spikes in mid-January and last week. These levels were the highest levels after the pandemic, again due to the possibility that inflation would act faster than expected.

Fed Chairman Powell said that even if the target level is exceeded many times, they will not implement a policy of rapid change. Statements came from Fed officials that there may be upward attacks in inflation, but no progress is expected in the direction of a permanent trend.

The CPI in the USA settled above 1% on an annual basis as of August and was 1.4% in December, while the core CPI, which is the most important item of the data, rose to 1.7% monthly. The CPI was 2.3% annually before the pandemic, and the annual rate of increase fell to 0.1% during the quarantine period. Afterwards, an increase was observed in the annual growth rate and the expectations that this increase will be faster in the near term with food, energy, cost and demand strengthened.

According to the latest data announced today, the CPI in the US in January;

  • Within expectations with 0.3%,
  • Below expectation with 1.4%,
  • 0.0% monthly, the lowest level after October and below expectations with 1.4% year-on-year.

The data set took a breath of fresh air against the inflationary attack in the USA that is still uneasy.

Having hit 91.60 last week, the highest level after December, it is in decline this week. The index, which was traded at 90.42 before inflation, fell to the level of 90.25 as the first reaction after the data, and rose to 1.2140 and 1.854 dollars. Before the data, priced at 7,0555 level decreased to 7,0335.

Author: Deniz Engin

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