Forex Daily Recap – Higher Probability of Rate Cut with Missed CPI Estimates

ECB President Mario Draghi commented today that the Central and Eastern Europe remains vulnerable to the trade war headwinds. Weak EIA Crude data resulted in a decline of Oil prices.
Nikhil Khandelwal
Financial concept of growth on the American Stock Exchange.

USD Index

The Greenback had slipped from 97.16 levels on last Friday amid poor May Non-Farm Payrolls and Average Earnings data. Until today, the US Dollar Index remained stuck below 97 levels. The US Consumer Price Index (CPI) data release was the key highlight for Wednesday, which came out at around 12:30 GMT. Market participants were eagerly waiting for these significant reports as the outcome would strengthen the Fed’s rate cut possibilities. Street analysts had expected the May YoY CPI that excluded Food & Energy to remain in-line with the previous 2.1%. Anyhow, the data came out 0.1% lower than the market expectation, reporting 2.0% this time. The May MoM CPI excluding Food & Energy also missed estimates. In the middle of such weak reports, MoM CPI came in-line with the consensus estimation of around 0.1%. Meantime, the May CPI Core recorded 0.11% higher than the previous 261.735 figures.

Consumer Price Index 12 Jun 2019

On an overall basis, the May CPI data showcased mixed reports. Fed Chairman Powell had earlier mentioned that the Bank would take up appropriate steps in case of an economic slowdown. Hence, the mixed CPI data would pressurize the Central Bank to make a rate cut happen sooner. On the other side, the US-China trade dispute continued to damage world businesses. Trump and Xi would meet up in the G20 Meeting about to happen by month end to discuss trade settlements. Coming back to USD Index’s performance, the Greenback marked the weekly low near 96.59 levels following CPI data release. Despite that, the Index took an immediate pickup and knocked off 96.80 levels. The Market seems to remain fingers crossed awaiting a near-by Fed rate cut.


After starting trading on Wednesday near 1.1329 levels, the pair seemed to remain negative as the day approached closing. The Fiber had displayed a slowly phased uptrend in the Asian session marking day’s high near 1.1343 levels. The slight early upliftment had occurred on the backdrop of mixed Euro-specific data release. The France Q1 QoQ Non-Farm Payrolls came out 0.2% higher than the market hopes of around 0.3%. Also, Spanish May HICP and CPI data reported in-line with the consensus estimates.

EURUSD 60 Min 12 June 2019

ECB President Mario Draghi commented today that Central and Eastern Europe remains vulnerable to the trade war headwinds. Draghi’s warnings left the Fiber traders unnerved and kept the pair plunging. Later the day, ECB’s Coeure mentioned that the Bank’s  Asset Purchase Programme (APP) was a good source of financial easing. At around 16:50 GMT, the EUR/USD pair was testing the healthy 1.1291 resistance levels, marking daily low.


The Loonie pair was trading 0.21% up in the late European session amid mixed CPI data and lowered Crude prices. The US CPI figures reported lower-than-expected while the CPI Core data revealed some bullish numbers. Meanwhile, the commodity prices reduced from $52.31 bbl, reaching $51.60 bbl after the release of disappointing EIA reports. The Market had expected a -0.481 million this time. Somehow, the actual reports showed up as 2.206 million showing lack of demand for the commodity. Hence, the USD/CAD pair maintained good growth today, quoting the day’s high near 1.1316 levels.


The Yuan pair marked the day’s opening near 6.9098 levels buckling up for some descent upliftments. The Chinese May CPI and PPI data came out in-line with the market expectations elevating USD/CNY pair. The YoY CPI reported near 2.7% higher than the previous 2.5%. Meanwhile, the MoM CPI recorded 0.0% over the last 0.1%. The USD/CNY pair touched 6.9222 levels marking day’s high following early morning Chinese data. Laterwards, in the rest of the Asian session, the pair appeared giving up the accumulated gains reaching 6.9132 levels.

USDCNY 60 Min 12 June 2019

However, the pair took a U-turn after the release of lower-than-expected May YoY M2 Money Supply data. In addition to that, the Chinese May New Loans recorded 1,180 billion over 1,225 billion forecasts. Anyhow, this time, the pair could lift itself only till 6.9214 levels. When the mixed US CPI figures came out, the pair seemed to drop 0.02% reaching 6.9168 levels.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.