The USD Feels the Pressure From Inflation: Overview for October 20, 2023

<div><img width="360" height="360" src="https://blog.roboforex.com/wp-content/uploads/2023/06/EURUSD_13-360×360.jpg" class="attachment-thumbnail size-thumbnail wp-post-image" alt="EUR/USD analysis today" decoding="async" style="margin-bottom: 15px;" loading="lazy" /></div><p><a href="https://roboforex.com/beginners/info/charts/forex/eurusd/" data-internallinksmanager029f6b8e52c="35" title="EUR/USD">EUR/USD</a> gains strength following remarks from the Federal Reserve chair.</p>

<p>The primary <a href="https://blog.roboforex.com/blog/2020/06/19/how-to-choose-a-currency-pair-for-trading-in-forex/" data-internallinksmanager029f6b8e52c="142" title="Currency Pair">currency pair</a> outperformed yesterday's levels on Friday. The current EUR/USD exchange rate is at 1.0575.</p>

<p>The US released data on existing home sales for September, revealing a decrease to 3.96 million from the previous 4.04 million. Although the forecast was somewhat bleak, predicting a drop to 3.89 million homes due to high borrowing costs.</p>

<p>Initial jobless claims in the US declined to 198,000, down from the previous week's 209,000. However, the improved employment market is now viewed with caution as it's seen as a contributing factor to <a href="https://blog.roboforex.com/blog/2022/06/30/what-is-inflation-reasons-and-consequences/" data-internallinksmanager029f6b8e52c="220" title="Inflation">inflation</a>.</p>

<p>Federal Reserve Chair Jerome Powell delivered a clear message in a speech yesterday: a robust economy demands a stringent monetary policy. Any further signs of the economy outpacing its natural growth rate could prompt additional tightening of monetary policy.</p>

<p>As previously mentioned, the Fed's strategy may involve substantial tightening. Achieving a return to 2% inflation will likely require a period of economic growth below its potential, along with localized easing of labor market conditions.</p>

<p>The fact that the economy is still robust and growing above its potential has surprised the Fed.</p>

<p>In summary, Powell's stance on monetary policy appears quite assertive. The potential for tighter policies supports the US dollar, but the market remains uncertain.</p>

<p>By the way, this was the Fed's final official speech before the November meeting.</p>

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