The Market pays attention to the direction of the Federal Reserve's monetary policy

The Market pays attention to the direction of the Federal Reserve's monetary policy

The US dollar rebounded yesterday, while gold fell under pressure

Due to market attention to US inflation data and the direction of the Federal Reserve's monetary policy, the US dollar rose against a basket of currencies on the 9th, and the US dollar index rose overnight in the market. It fluctuated higher on the same day and rose in the end of the day. The US dollar index, which measures the US dollar against six major currencies, rose 0.35% on the same day and closed at 102.570 at the end of the foreign exchange market.

On Tuesday (January 9), despite the decline in US bond yields, the gold price remained volatile near 2030 US dollars/ounce due to the pressure of the strengthening US dollar. US economic data shows improved confidence among small businesses and a narrowing trade deficit, affecting the dynamics of gold. Investors are waiting for US CPI data to seek further direction, and the trend of gold prices may be influenced by inflation expectations.

Foreign exchange broker Monex USA stated in the morning of the same day that the current market sentiment is mainly driven by last week's data, which seems to directly raise concerns in the market that the Federal Reserve may not cut interest rates for a longer period of time. The Federal Reserve seems to be adopting a “wait-and-see” attitude in search of signs that may sound the alarm and steer it towards a more moderate stance.