EURUSD plunged after the US statistics on prices.
The major currency pair reversed dramatically last Friday. The current quote for the instrument is 1.1560.
The situation was quite clear until the US released the September data on the Core PCE Price Index, which added 0.2% m/m, the same as expected, after expanding by 0.3% m/m the month before. However, on YoY, it increased by 4.4%. This indicator is one of the key inflation parameters assessed by the US Fed. On the verge of the regulator’s November meeting, it’s not much of a positive piece of news.
The report made the 10-year US bond yield rise and the “greenback” followed.
The Personal Spending in the US added 0.6% m/m in September, matching the expectations, after expanding by 1.0% in the previous month. The report shows that consumers are in a hopeful mood, the same as before, and that’s good. The Personal Income dropped 1.0% m/m after adding 0.2% in August. The reason for that might be the absence of one-time social insurance benefits, for example.
This week, investors are focused on the US Fed session scheduled for 2-3 November – they are expecting the regulator to announce its decision on the QE programme reduction. The current volume is $120 billion and the Fed may cut it down by $15 billion. Further still, market players believe that the Fed will close the programme completely by mid-2022. At that time, the regulator may return to discussing the benchmark interest rate revision.