The US dollar was stronger after the market concern about the inflation increase appeared. That ahead to the world fuel and oil price increase. What is the number? 

On the Wednesday trading, the index of dollar rose by 0.33% to 94.28 which was a high level last week. The rising energy price may have an impact to the inflation. 

The Stocks slumped after in recent days the oil prices reportedly rose to a seven-year high. This condition is able to trigger a rise in inflation, so investors switch from high risk assets to safe havens.

The examples are like the U.S. Dollar and government bond yields. Although the oil prices began to fall today, the energy supplies in some countries are still in trouble. 

The Market is Still Dominated by this Concern

Therefore, the risk aversion action is still preferred by investors to secure their investments from the impact of inflation in the future. An expert Gave his opinion on this. 

The rising oil and commodity prices in general, with gasoline scarcity in particular, are an energy addition to rising bond yields. That is because of their implications for inflation.

This opinion threw by Mike Bell, an analyst at JP Morgan Asset Management. That Bell's statement was echoed by Minh Trang as a senior trader at Sillicon Valley Bank. 

Trang said that this week the market was dominated by the concerns of widespread inflation in the overall market. In turn, the Fed's policy will be noticed because the boost in inflation increases has a lot to do with raising rates

A Sign Given by the Central Bank

The U.S. central bank has signaled that a reduction in monthly bond purchases will be implemented as soon as November this year. Meanwhile, how about the rate hike?

It is said that the rate hike will follow if the United States economy has regained a momentum after the crisis. The question is whether it will force the Fed to act faster than expected or not. 

Elsewhere, the ADP data is positive and the USA is also still awaited. Apart from these issues, the rise of the US Dollar tonight was also triggered by the slick ADP Employment Change data. 

The ADP Data May not be the Only Reference 

The United States private sector added 568,000 jobs in September. That was more than the expectations of 425,000 and the previous period's data at 340,000, but it is not the only reference to have. 

ADP Employment Change is often unable to be used as a clue to non-farm payroll data that will be released on Friday. The investors will focus on the America’s NFP data.

They are hoping to get a clearer guidance on the Fed's tapering signals. Meanwhile, The Reserve Bank of New Zealand (RBNZ) raised interest rates from 0.25% to 0.50% on Wednesday. 

The rate hike decided by the RBNZ marks the start of a cycle of monetary tightening that had been expected since last August. Before, that was delayed due to the Coronavirus outbreak in New Zealand. 

The Monetary Policy Stimulus may be Deleted

In its monetary policy announcement, the RBNZ said that the removal of further monetary policy stimulus had also been expected. There is even the possibility of another rate hike in November.

It is especially to cope with the rising inflation and sluggish housing markets. However, it is depending on the outlook for inflation and employment in the medium term.

As of this October, the New Zealand government has abandoned the zero-tolerance strategy (lockdown must be done even though there is only one case of COVID) in dealing with the COVID-19 outbreak. 

Although the strategy had made New Zealand as a country with zero cases of COVID at the beginning of the pandemic, the local government now prefers to rely on vaccination.