Consequences of rising inflation in the US

The rapid rise in inflation in the US translates into both the US dollar and the gold quotation, silver or cryptocurrencies. The latest data showed that inflation in the US rose more than expected in October, to 6,2%. This is the highest reading since 1990 and raises concerns that price pressures may weigh on the economy much longer than previously expected.

Expectations for earlier monetary policy tightening were also revived Federal Reserveand the Fed funds rate futures increased the chances of the first full hike in interest rates in July 2022, and another hike could take place in December 2022.

The dollar appreciated significantly

It seems that the rise in inflation and the chances of faster interest rate hikes could definitely strengthen the US currency. The US dollar index surpassed 95 points on Friday, climbing to the highest level since July 2020. Fed officials, however, reject discussions on interest rate hikes, but they seem to be divided on this issue.

The main currency pair fell below 1,1500 and was at the level seen most recently in mid-July 2020. This week the euro seems to be losing slightly more than 1% against the dollar this week. GBP / USD exchange rate in turn, it fell below 1,3400 and the British currency to USD seems to be losing 0,9%. Among the world's major currencies, there is no one that could gain against the USD this week.

Precious metals and cryptocurrencies with rapid growth

A very marked increase inflation in the US He woke up investors in the precious metals markets, where gold and silver prices rose significantly after the CPI release. Only this week, the price of silver could increase by almost 5%. above $ 25 an ounce, and the price of gold appears to have risen by less than 2,5 percent during this time, reaching the region of $ 1860 an ounce.

Cryptocurrency quotes, as a potential hedge against inflation in the US, also seemed to respond with increases. Bitcoin hit a new all-time high of around $ 69 after the release of inflation before dropping to $ 000. What caused the fall? Investors may have realized some of the potential gains and wondered what the latest data on consumer prices meant.

Cryptocurrencies appear to be appreciating since July amid concerns over inflation, dovish comments from central bankers, and growing government acceptance as well as ETF regulation and expectations. Expectations of higher interest rates, however, could hurt high-risk assets, including bitcoin, as cryptocurrencies have largely thrived in an environment of high inflation and low interest rates.