He global dollar continues adrift after it fell on Friday when it was learned that the inflation annualized in USA continued to decline while the labor market remained fairly healthy over the past month.
He dollar indexwhich measures the price of the greenback against a basket of six currencies, fell 0.17% to 100.43 after falling to 100.15, its lowest level since July 20, 2023, while the euro fell 0.14% to $1.116, Reuters reported.
Thus, the greenback fell around 0.2% in the week, in its fourth consecutive weekly drop and the ninth in the last 10.
US inflation data
He Department of Commerce American published this morning the consumer price index (PCE), the favorite indicator of the Federal Reserve (Fed), which fell to 2.2% year-on-year in August, compared to 2.5% in July. However, the core inflationwhich excludes the most volatile prices such as food and energy, rose to 2.7% in the 12-month measurement, compared to 2.6% in July.
Analysts do not expect this data to materially change market prices for US rates any lower. Traders are pricing in a 74 basis point cut for the rest of the year, with a 51% chance of another aggressive 50 bp cut, according to the tool FedWatch from CME Group.
“The chairman of the Federal Reserve, Jerome Powell can breathe a sigh of relief,” he said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin. “After pushing for a 50 basis point cut instead of the more conventional 25 basis point cut, personal income and spending data so far justify that decision,” he noted. .
The strength of the yen
Meanwhile, the yen rose 1.88% to 142.12 per dollar after strengthening to 142.09, on track for its biggest daily percentage gain since August 2, after Japan’s former defense minister, Shigeru Ishibawill win the race for leadership of the ruling Liberal Democratic Partyheading to become its next prime minister.
Ishiba is critical of past monetary stimulus and told Reuters the central bank was “on the right track” with rate hikes so far.
Additionally, the dollar strengthened by 0.11% to 6.979 against the yuan Chinese offshore, while the euro fell 0.14% to $1.116 and the pound sterling fell 0.3%, to $1.3375.
Source: Ambito
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