This week the inflation data was released in the United States and the expectation is that the Federal Reserve will not modify the rates. Thus, the dollar weakens in the world and loses against other currencies.
The dollar is close to 15-month lows this Friday and is on track to close its biggest weekly drop since November, after US inflation data fueled investor bets that the Federal Reserve (Fed) it was near the end of its rate hike cycle.
He dollar index, which measures the performance of the US currency against a basket of six currencies, rose 0.06% to 99.827, after earlier hitting a 15-month low of 99.574. The index has lost 2.4% in the week so far, thus accumulating its biggest weekly drop in eight months.
The prices of American production they barely rose in June and the annual increase in producer inflation was the smallest in nearly three years, data showed Thursday, a day after data showed consumer prices rose modestly last month.
“In general, the markets are quite satisfied with the lower inflation data, coupled with the still resilient labor market, supports the narrative of a soft landing in the economy of USAsaid Carol Kong, currency strategist at Commonwealth Bank Of Australia in Sydney.
Recession in the United States?
But he clarified that they continue to maintain their opinion that USA it will go into recession later this year due to the impact of past and potentially future interest rate hikes.
According to CME’s FedWatch tool, markets are still pricing in a 95% chance of a 25 basis point hike by the Federal Reserve later this month, but not for the rest of the year.
The authorities of the Federal Reserve remains cautiousand the Governor of the Federal Reserve, Christopher Waller, says he is not ready to settle the issue of inflation in the United States and is in favor of more rate hikes this year.
The dollar against other currencies
Against a weakening dollar, the euro touched a fresh 16-month high of $1.1243 in the Asian session, before stabilizing at $1.1227. Meanwhile, the Japanese yen weakened 0.25% to 138.41 per dollar and is heading for its best week against the dollar since January.
Source: Ambito
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