As a reaction of Wednesday Australian CPI (Consumer Price Index) release, the AUD/USD registered a sharp drop from 0.72 and hit the support line from 0.7120. The qoq (quarter-on –quarter) Australian CPI for the 3rd quarter came at 0.5%, with an expected 0.6%. The annual figure posted 1.5% versus 1.7% expected.
EUR/USD also registered a drop on Wednesday and lost more than 100 pips in a matter of minutes in the post-release minutes of Fed’s (US Federal Reserve) statement.
As expected, the rate was left unchanged going forward, but the surprise came after the bank announce that the appropriate decision for a rate hike will be decided in the next meeting.
As per percentages, the rate hike probability scores at 47%, standing at 35% before the release. The FOMC statement (Federal Open Market Committee) declares certain a rate move in December if the global economic developments will permit.
Thursday was released the quarterly data by the US Commerce Department which showed a slower expansion for the third quarter of this year. The GDP (Gross Domestic Product) missed the estimated 1.6% growth, coming in at only +1.5% annualized rate. As per the report, bloated stockpiles fell as consequence of the rise in consumer and business spending. The inventory growth pace was 3% with a previous reading of 3.9%. Household purchases (latest result show that they represent just under 70% of the economy), went up with a 3.2% annualized figure compared to a 3.6% annual rise in the previous quarter. The core PCE (Personal Consumption Expenditure) indicator missed the estimated 1.4%, printing 0.1% under at 1.3% with a prior quarter PCE unrevised at 1.9%.
Overall, the results of the analysis are in line with Wednesday’s FOMC release, the economy continuing to grow at a moderate pace. A worrying factor is though the drop in the core PCE.
As for the yellow metal, thing are not so bright prices dropping over 2% yesterday, extending Wednesday’s losses. The recent $1,145.70 low is the smallest threshold reached since the 9th of October. At the moment of writing the gold traded around $1,147.60. This grim picture comes after what it seemed to be a good period, with trend that was breaking important resistance levels at the begging of last week, in the vicinity of $1,200. Since the end of last week though, a bearish tone has set upon the valuable metal which now accelerated and pushed the price below the important $1,150 handle.
