US dollar falls in anticipation of today's inflation data - 10.2.2021

On Tuesday, the US dollar index dropped for the third day in a row and reached a 2-week low, the main reason for which was the risk of increased inflation in the United States after the allocation of $1.9 trillion to stimulate the American economy, affected by the coronavirus pandemic. New President Joe Biden’s plan is now being actively approved in the United States Senate. The Consumer Inflation Expectations indicator for January of this year, amounting to 3.05%, was released on Monday. It is calculated according to a survey of American households. Official inflation data for January 2021 is due out today. It is predicted to be 2% annually, the highest since February 2020. Expectations of high inflation contributed to the weakening of the greenback in the past few days. The data on wholesale inventories for December will be published today in the US, the outlook is neutral. The dynamics of the US dollar exchange rate may also be influenced by Fed Chairman Jerome Powell's speech today.

There was no single trend on the American stock market on Tuesday. The NASDAQ is up, the S&P 500 is down, and the Dow Jones Industrial Average is almost flat. The US didn't publish any significant macroeconomic data yesterday. Quarterly reports of Cisco corporation (-5.5%) disappointed investors. Revenue declined for the 5th straight quarter. Twitter's reporting was positive and its shares gained 3.5%. The stock market is supported by a reduction in the number of Covid-19 cases in the USA. Investors are waiting for the end of the pandemic. The number of vaccinated Americans reached 33 million. An additional positive factor is the expectation of a $1.9 trillion coronavirus relief bill. This weakens the dollar but supports US stocks. Coca-Cola, Uber, General Motors and other companies will report for the 4th quarter of 2020 today. Refinitiv is now expecting S&P 500 aggregate quarterly earnings to rise by 2.5%, while at the beginning of the year it was predicted to decrease by 10.3%. Strong financial performance is pushing US stock indices to new all-time highs.

World oil prices on Tuesday rose for the 7th day in a row. Investors react to production cuts in Saudi Arabia. Brent quotes updated a 12-month high and exceeded the psychological level of $60 per barrel. The independent American Petroleum Institute announced a drop in US oil reserves for the third time in a row, by 3.5 million barrels in a week - to 474.1 million. Official data on reserves will be released today. Recall that the goal of reducing production by Saudi Arabia and OPEC as a whole is to decrease world oil reserves below the 5-year average by June 2021.

Copper prices hit an 8-year high today amid the weakening US dollar and China's deflation data in January (-0.3% yoy). China consumes about half of the world’s copper.