On Thursday (August 12), trading in the US market was relatively quiet, and the US dollar index rose slightly above the 93 mark; spot gold rebounded to flat and slightly above the trading after hitting a low of $1,741.43 in the early trading; U.S. stocks rose and fell mixed, and the Dow Jones Industrial Average and the S&P 500 index hit an intraday high again, but the Dow Jones Industrial Average is still trading below the flat. The U.S. economic data released earlier this day all performed strongly. The U.S. Department of Labor said the producer price index (PPI) rose another 1% in July, hitting a new high since January 2021, jumping 7.8% year-on-year, a record high, the U.S. Department of Labor said. Meanwhile, the number of initial jobless claims in the U.S. has fallen back to near its pandemic-related lows. The U.S. Department of Labor said the number of initial jobless requests fell by nearly 12,000 to 375,000 last week, staying below 400,000 for the third consecutive week.
The U.S. Department of Labor reported Thursday that the U.S. producer price index (PPI) rose more than expected in July, suggesting inflation could remain high, as strong demand triggered by the economic recovery continues to hurt supply chains.
, the PPI index, which reflects final demand, rose by 1.0% last month after rising 1.0% in June. In the 12 months to July, PPI jumped 7.8%, hitting a new high since the indicator was launched more than 10 years ago.
, which excludes volatile food, trade services and energy components, the producer price index (PPI) rose 0.9% last month, compared with an earlier forecast of 0.5%.
The day before, the U.S. Department of Labor announced that the Consumer Price Index (CPI) in July rose 5.4% from the same period last year and 0.5% from the previous month. However, core inflation rose only 0.3% in July, below the 0.4% growth forecast. "Inflation has been suspended at least. Both the overall data and the core data are stable or down from the previous month. From these data, inflation certainly will not be unstoppable."
He added: "Inflation rise is more of an isolated part than an overall price increase, and even these parts show signs of peaking. When we delve into these data, inflation is higher than previous levels, but there are signs that inflation is rolling and returning to a more comfortable level."
Meanwhile, the number of initial unemployment claims fell further last week, and the job market recovery is still making progress, although the threat of the Delta variant remains.
The U.S. Department of Labor said Thursday that the number of initial jobless claims fell slightly last week, and the U.S. labor market continued to recover from last year's recession. Last week, 375,000 people filed for unemployment benefits, consistent with expectations. The previous data was 385,000 people.
The number of initial unemployment benefits has dropped for the third consecutive week, below the important psychological level of 400,000 people. The number of people who renewed unemployment benefits has also dropped to below 3 million, close to the level before the outbreak of the epidemic.
Economists have been expecting an increase in individuals returning to the labor market as more states cancel additional federal unemployment benefits. As of midsummer, about 24 states have decided to terminate these benefits before they are officially expiring nationwide in September, a move seen as encouraging workers to return to work.
As of July 24, more than 12 million people still applied for unemployment benefits in all projects. This means that it has dropped by more than 900,000 compared with the previous week, and the decline has accelerated significantly compared with the previous week's drop of about 200,000. As of the latest data, more than 8.5 million people have applied for pandemic unemployment assistance and pandemic emergency unemployment compensation during crisis times.
Recently, the spread of the delta variant throughout the United States has raised questions about the speed of further development of the labor market, adding another obstacle to achieving full employment. The impact of airlines and travel companies on the variant is the most outspoken, with Southwest highlighting Wednesday that bookings have fallen as infections in hot spots increase and cancellations increase.
As the U.S. PPI recorded its biggest annual growth in more than a decade, suggesting inflationary pressure remains strong, the dollar rose slightly against a basket of currencies on Thursday.
The dollar index, which measures the dollar index, rose more than 0.1% to 93.04 against a basket of six currencies.
(USD 30-minute chart, source: FX168)
Investors are still wary of any signs of overheating inflation, as this may prompt the Fed to reduce asset purchases and the timing of interest rate hikes ahead of schedule.
"The job market strengthens and inflation is at an all-time high, which is the reason for the dollar's strengthening," said Joe Manimbo, senior market analyst at Western Union Business Solutions.
USD has generally strengthened since mid-June, hitting its high since April 1 93.195 before Wednesday's data was released.
"The current general consensus among FOMC members is that the time to reduce the scale of asset purchases is approaching," wrote Kim Mundy, a strategist at the Federal Bank of Australia, in a research note.
"The increasing expectations for recent shrinkage may support the dollar." Mundy expects that if August's employment data remain strong, it will announce a reduction in September.
During the US market, spot gold once hit a low of $1741.43, but then rebounded from the low to slightly above the flat market.
(spot gold 30-minute chart, source: FX168)
Commodity analyst Vivek Dhar of the Australian Federal Bank wrote: "The strengthening of the dollar, coupled with the gradual rise in the US 10-year real rate of return, indicates that the price of gold should tend to fall."
He predicted that by the first quarter of 2022, the price of gold will fall to $1,700.
US stocks were basically flat, with the Dow Jones Index and the S&P 500 Index both hitting mid-highs.
Dow Jones Index fell 100 points after hitting an all-time high at the opening, and its decline has narrowed to around 15 points. The S&P 500 fell 0.1% at one point before rising 0.2%, setting a new intraday high. The Nasdaq Composite Index rose slightly by 0.3%.
(Dow Jones 30-minute chart, source: FX168)
Senior analyst Sam Bullard of Wells Fargo wrote in a report: "As released last week, data released in early third quarters showed that GDP growth was further strong and the labor market is recovering."
"With that being said, the surge in hospitalizations and deaths caused by the COVID-19 pandemic must be controlled and poses a downside risk to the outlook for growth and job markets - especially if staff are allowed to return to offices and reopen schools this fall is postponed."
This article is derived from FX168
