He dollar falls this Thursday to two-month lows after learning that the us inflation it slowed sharply in March and after US producer prices unexpectedly fell in March, raising expectations that the Federal Reserve is near the end of the rate hike cycle.
The Producer Price Index for final demand fell 0.5% last month. In the 12 months to March, the PPI rose 2.7%. It was the smallest year-on-year rise since January 2021 and followed a 4.9% rise in February.
The data follows figures published on Wednesday that showed US Consumer Price Index (CPI) inflation stood at 5% year-on-year in March, down from 6% in February. Core inflation, which strips out volatile energy and food prices, rose to 5.6% after 5.5% the previous month.
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“We’re heading back to a world of low inflation, that’s the market message right now,” said Adam Button, chief currency analyst at ForexLive in Toronto. “The next big change is that the fear of inflation is over.”
The dollar index, which measures the greenback’s performance against a basket of six currencies, hit its lowest level since February 2 at 100.86. The euro hit $1.1066, its highest since April 1, 2022.
The single currency is being boosted by a relatively more aggressive European Central Bank which is expected to continue raising rates to cope with inflation.
The next big data out of the US will be Friday’s retail sales, which will be looked at to see how inflation is affecting consumer spending.
Other data Thursday showed the number of Americans filing new claims for jobless benefits rose more than expected last week, a further sign that labor market conditions are easing as higher borrowing costs ease. demand in the economy. The dollar was down 0.80% against the yen at 132.13.
Source: Ambito
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