Aug 08, 2023

On Friday, employment data from the United States and Canada will be released and are expected to influence the exchange rate.

US30 – Weekly Chart

US30 – Weekly Chart

The US30 index has broken through the resistance level of 34,500 and may continue to rise towards the all-time high of 36,971.

Inflation is expected to remain at 4.8% this week, while the year-on-year inflation rate is expected to rise to 3.3% from 3%. If the inflation rate is lower than expected, the US stock market could see a further rally.

Jerome Powell, the Chairman of the Federal Reserve, expressed hawkish views last week. He told reporters in Washington on July 26 that he does not anticipate inflation to drop to 2% until around 2025.

US Federal Reserve Chairman Jerome Powell stated that the process of bringing inflation down to 2% will be long and difficult. The central bank raised its benchmark rate to a range of 5.25% to 5.5% after the consumer price index increased by 0.2% in June.

The current interest rate of 3% is still far from the peak of 9.1%, but Powell is still aiming for a sharp increase to 2%. “If we see inflation coming down in a credible and sustainable way, then we don’t need to be at a restrictive level anymore,” he explained. “You’d stop raising rates long before you got to 2%.” Another Fed official, Michelle Bowman, said that more rate hikes were needed.

“We have made some progress in reducing inflation over the past year, but it is still significantly higher than the Fed’s target of 2%,” Bowman stated.

Bowman, a hawkish member of the Federal Reserve’s rate-setting committee, stated that the job market “remains tight, with job openings still far exceeding the number of available workers.”

Bowman said that she supported the Federal Open Market Committee’s decision to raise interest rates in July, and that she believes additional increases will be necessary to bring inflation down to the FOMC’s target.

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