Inflation Impacts All Currencies Including Cryptos

If inflation doesn’t diminish, Fed may need to taper at a more considerable rate and hike interest rates, which could hurt stock and bond markets.

Against Japan’s yen the U. S. dollar was last up 0.85% to 113.86 yen after touching Wednesday’s session high of 113.940. On Tuesday the dollar had hit a month-low against the yen.

Shocking inflation data in addition to sharp housing price increases suggest that high consumer prices are not likely to prove transitory.

The euro was last down 0.61% at $1.1523 after earlier touching $1.15115, its lowest level since July 21, 2020.

Hammered last week after the Bank of England’s surprise decision to keep rates unchanged, the GBP was last down 0.59% at $1.3482, but still holding above Friday’s more than one-month low of $1.3425.

The Australian dollar was down 0.24% against the U. S. dollar at $0.7363 after earlier hitting $0.7341, its lowest level since Oct. 13. The New Zealand dollar was down 0.55% against the U.S. dollar at $0.7091.

Inflation is going to be long lasting and structural inflation has picked up speed. The bottom line is that this is going to be a real challenge for the Fed in the coming months and suggests that inflation has not peaked.

U.S. producer prices increased solidly in October, driven by surging costs for gasoline and motor vehicle retailing, suggesting that high inflation could persist.

In cryptocurrencies, bitcoin jumped to an all-time high of $69,000.00 after the U.S. inflation data and was last up 2.5% at $68,632.87.