Inflation outlook unchanged as job concerns mount: NY Fed consumer survey

One-year US inflation expectations held at 3.9%. The New York Fed Survey of Consumer Expectations (SCE) for October showed no change from September, with respondents expecting petrol prices could moderate over the next twelve months.

Households were more optimistic about their personal finances, while inflation expectations at the three- and five-year horizons held at their previous readings of 3.3% and 3%, respectively.

An increase in the unemployment rate to its highest level since 2020 is expected by consumers, according to the survey. Expected home price growth remained steady at 3%.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

0.12% Gain Against CHF: US Dollar Today

Against the major currencies listed below, the US Dollar (USD) recorded its strongest performance against the Swiss Franc today. The table sets out the day's percentage moves.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.54%	-0.49%	-0.30%	0.05%	-0.64%	-1.32%	0.12%
EUR	0.54%		0.05%	0.25%	0.58%	-0.11%	-0.79%	0.65%
GBP	0.49%	-0.05%		0.21%	0.53%	-0.17%	-0.84%	0.60%
JPY	0.30%	-0.25%	-0.21%		0.34%	-0.35%	-1.02%	0.41%
CAD	-0.05%	-0.58%	-0.53%	-0.34%		-0.68%	-1.35%	0.07%
AUD	0.64%	0.11%	0.17%	0.35%	0.68%		-0.67%	0.76%
NZD	1.32%	0.79%	0.84%	1.02%	1.35%	0.67%		1.45%
CHF	-0.12%	-0.65%	-0.60%	-0.41%	-0.07%	-0.76%	-1.45%

Percentage movements between major currencies appear in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. To read USD (base)/JPY (quote), for example, start with the US Dollar on the left and follow that row across to the Japanese Yen. The intersecting cell gives the pair's percentage change.

Inflation: Key Questions Answered

Inflation and price growth

A rise in the cost of a representative basket of goods and services is measured by inflation. The headline rate is generally reported as a month-on-month (MoM) and year-on-year (YoY) percentage change. Stripping out more volatile components, including food and fuel, produces core inflation. These components can swing with geopolitical developments and seasonal factors. Economists concentrate on the core measure, which is also targeted by central banks. Their mandate is to maintain manageable inflation, typically around 2%.

Consumer Price Index (CPI) explained

Price movements across a basket of goods and services over time are tracked by the Consumer Price Index (CPI). Reporting normally takes the form of month-on-month (MoM) and year-on-year (YoY) percentage changes. Central banks target Core CPI because it removes volatile food and fuel components. A reading above 2% generally leads to higher interest rates; a reading below 2% usually has the reverse effect. As higher rates support a currency, rising inflation typically strengthens it. Falling inflation tends to produce the opposite outcome.

Inflation's effect on foreign exchange

A country's currency gains value when inflation is high and loses value when inflation is lower, despite the apparently counter-intuitive relationship. The explanation lies in interest rates: central banks normally raise them to contain higher inflation. Those higher rates draw in more international capital from investors seeking an attractive return on their funds.

Inflation and the Gold price

Investors historically sought Gold during periods of high inflation for its ability to retain value. Its safe-haven appeal still often attracts buyers during extreme market turmoil, but Gold is no longer the usual choice in most high-inflation periods. Central banks respond to high inflation by raising interest rates to bring it under control. For Gold, higher rates are a headwind: holding the metal carries a greater opportunity cost relative to owning an interest-bearing asset or keeping funds in a cash deposit account. Lower inflation, by contrast, generally supports Gold because it brings rates down, improving the metal's appeal as an alternative investment.