More USD weakness when the PCE deflator is low than USD strength when it is high – Commerzbank

Source Fxstreet

Thursday will see the release of the PCE deflator for January, the measure that the Fed considers most appropriate for measuring price stability. Economists at Commerzbank analyze US Dollar (USD) outlook ahead of the report.

Another upside surprise in the PCE would reinforce the picture of stubbornly high US inflation

Another upside surprise in the PCE deflator would reinforce the picture of stubbornly high US inflation. It would confirm the USD strength we saw after the CPI numbers, but which is now fading.

On the other hand, a low PCE deflator could give the market a clearer rethink. In my view, the market has taken the January CPI number a bit too seriously: too much as a signal that the disinflation process is stalling, too little as noise. If the PCE number were to confirm my suspicions, the whole nice story behind the recent USD strength would be called into question.

In short, without an opinion on the PCE deflator, I suspect an asymmetric market reaction: more USD weakness when the PCE deflator is low than USD strength when it is high.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold rebounds to $3,946 off $3,870 as oil does the Fed's work — but the ETF bid is still missingGold closed at $3,946, up 1.84% from a one-year low of $3,870.25, as Brent's 7.6% slide cut December hike odds to 77%. ETF holdings are still shrinking — a short-covering bounce, not new money.
Author  Irene Q.
Nov 03, Tue
Gold closed at $3,946, up 1.84% from a one-year low of $3,870.25, as Brent's 7.6% slide cut December hike odds to 77%. ETF holdings are still shrinking — a short-covering bounce, not new money.
placeholder
Gold Price Analysis Today | Forex Gold Analysis | XAU/USD Analysis - November 5, 2026Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for November 5, 2026. Read on for the details.
Author  Mitrade
Nov 05, Thu
Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for November 5, 2026. Read on for the details.
placeholder
Gold Price Analysis Today | Forex Gold Analysis | XAU/USD Analysis - November 6, 2026Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for November 6, 2026. Read on for the details.
Author  Mitrade
Yesterday 01: 36
Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for November 6, 2026. Read on for the details.
placeholder
Gold's $250 week runs into the last payrolls before DecemberSpot gold traded at $4,080.79 after a roughly 6% weekly rally from the Oct 30 low of $3,869.85, touching $4,146.63 on Nov 5. Three bids are stacked into the move: real-rate relief, record official-sector buying, and a geopolitical premium. Tonight's October payrolls (+65K consensus, 4.2% unemployment) decide which bid survives, with $4,000 and $4,200 as the two lines.
Author  Irene Q.
Yesterday 03: 03
Spot gold traded at $4,080.79 after a roughly 6% weekly rally from the Oct 30 low of $3,869.85, touching $4,146.63 on Nov 5. Three bids are stacked into the move: real-rate relief, record official-sector buying, and a geopolitical premium. Tonight's October payrolls (+65K consensus, 4.2% unemployment) decide which bid survives, with $4,000 and $4,200 as the two lines.
placeholder
Micron's $4.5 billion Taiwan fab won't make a chip until 2028 — the market sold it as a 2026 problemMicron fell 17.46% to $656.39 after Bloomberg reported construction at its $4.5 billion Taoyuan Fab 11E had all but halted over a labor dispute. The plant was not due online until 2028, so no 2026 output is lost. With FY27 EPS consensus near $160 and 2027 HBM sold out, the selloff is a peak-cycle multiple reset, not a demand collapse — and $650 is the line that separates the two.
Author  Irene Q.
Yesterday 03: 28
Micron fell 17.46% to $656.39 after Bloomberg reported construction at its $4.5 billion Taoyuan Fab 11E had all but halted over a labor dispute. The plant was not due online until 2028, so no 2026 output is lost. With FY27 EPS consensus near $160 and 2027 HBM sold out, the selloff is a peak-cycle multiple reset, not a demand collapse — and $650 is the line that separates the two.
Related Instrument
goTop
quote