He global dollar rose to a new six-and-a-half-month high and the Japanese yen fell to its lowest level since July, boosted by calls “Trump operations” before key data inflation of USA to be published later in the day, fundamental to the monetary policy decisions of the Federal Reserve (Fed).
He index dollar —which measures the performance of the greenback in relation to a basket of six other internationally relevant currencies— rose for the fourth consecutive session, 0.1% to 106.12 units. The currency is still reaping the benefits of the Republican’s victory donald trump in the US presidential election last week.
At the same time, investors are discounting debt reduction policies. taxes and new duty trade of the incoming administration, measures that are considered inflationary and that could boost the Federal Reserve to limit the scope of your flexibility of interest rates; which pushes up the value of the currency while the Republicans moved a little closer to gaining full control of the Congress, which would give the president-elect more power to push his agenda.
“There is still room for more gains from dollar”, told Reuters Mitul Kotecha, Head of FX and Emerging Markets Macro Strategy at Barclays. The full magnitude of threatened U.S. tariffs on global imports, potential fiscal stimulus through tax cuts and deregulation, as well as data pointing to continued U.S. economic strength next year are factors favoring the dollar, he added.
On Wednesday, the focus will be on a new reading of US inflation, with the report from the Consumer Price Index (CPI) October that will be published this afternoon. The core index is expected to have risen 0.3% in October, in line with the previous month’s increase.
“Evidence of a pick-up in headline inflation amid a stable core inflation rate could boost (the dollar) further overall,” strategists at Unicredit in a note, adding that it is unlikely that the signs of deflation significantly affect the strength of the greenback. “A retreat from dollar, “even partial, would likely become a buying opportunity on dips very soon, given the market sentiment currently prevailing,” they added.
The president of the Federal Reserve, Jerome Powell, He is scheduled to speak this week, ahead of wholesale price data on Thursday and retail sales on Friday.
Markets currently assign a probability of around 60% of another quarter-point cut by the Fed in December, below the 84% of a month ago, according to the tool FedWatch of CME Group.
On the other hand, the bitcoin It halted its record rise, falling about 1% to $87,428 after hitting an all-time high of $89,998 on Tuesday. While wholesale inflation Japan accelerated in October to the fastest annual pace in more than a year, complicating the decision by the Bank of Japan (BoJ) on when to raise interest rates.
The dollar in Uruguay, unstoppable
Meanwhile, in Uruguay, he dollar rose 0.35% compared to Monday and closed at 42,469 pesos, according to the price of the Central Bank of Uruguay (BCU), so that the greenback advances unstoppably and reached its highest value of the year, breaking highs of almost 32 months.
Meanwhile, the US currency has accumulated an improvement of 1.97% so far this month, driven by the victory of donald trump in USA and the devaluation of real in Brazil, while the appreciation reaches 8.83% in the accumulated year.
Source: Ambito
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