Monday, March 4, 2024
HomeboeDollar near two-week low ahead of US inflation data

Dollar near two-week low ahead of US inflation data

Published on

Interview with an Anonymous Billionaire’s Son: Navigating Wealth and Responsibility

'ABS' is pictured above, with the promised anonymity on face and location. FinanceNews.co.uk (FN): Today, Mel Kern has a unique opportunity to speak with an...

The US dollar remained near a two-week low on Thursday as investors awaited the release of US inflation data, which will influence the Federal Reserve’s upcoming policy decisions. The dollar index, which measures the US currency against six other major currencies, was relatively flat at 105.69. The euro and yen also held steady against the dollar. The release of September’s US consumer price index data, expected to show a moderation in inflation, will likely support the argument that the Federal Reserve has completed its tightening cycle, leading to lower US Treasury yields and a weaker dollar.

A currency strategist at Commonwealth Bank of Australia, Carol Kong, stated that an unexpected decrease in inflation would strengthen the case for the Federal Open Market Committee to halt its projected 25 basis point rate hike. On the other hand, an upside surprise in inflation figures would likely prompt markets to revise upward the likelihood of a rate hike.

According to the CME FedWatch tool, futures markets are currently pricing in a 26 percent chance of a 25 basis point increase in interest rates by the December meeting, and only a 9 percent chance of a rate hike at the next meeting in November.

The recent weakness of the US dollar can be attributed to declining Treasury yields, which have been driven by the Federal Reserve’s more cautious approach towards future rate rises. The yield on 10-year Treasury notes has decreased slightly to 4.575 percent after reaching its highest level since 2007 last week. It has fallen more than 20 basis points this week.

In addition to the US inflation data, currency investors are also keeping an eye on sluggish UK growth figures released on Thursday. The data showed a partial recovery in the UK economy during August following a significant contraction in July. The initial reaction in the pound was relatively muted, but it later declined by 0.16 percent against the dollar, reaching $1.2294.

The pound had been the best-performing G10 currency in the first half of the year due to better-than-expected economic data and expectations that the Bank of England (BoE) would raise interest rates for a longer period compared to other central banks. However, it experienced its worst month in a year in September as these factors reversed. Nick Rees, FX market analyst at Monex Europe, commented that without a pickup in growth, inflation is likely to cool back towards the BoE’s target, and a final rate hike this year seems risky given the current economic weakness. It appears that the foreign exchange markets share a similar view.

The release of the US consumer price index data follows Wednesday’s mixed report on US producer prices and the minutes from the Federal Reserve’s September meeting. The minutes revealed that uncertainties surrounding the US economy, oil prices, and financial markets are supporting a cautious approach to additional policy tightening.

Meanwhile, the Swiss franc is set to strengthen for the seventh consecutive session, marking the longest streak since July 2020.

More detail via www.theepochtimes.com here… ( Image via www.theepochtimes.com )

Latest...

Erc-7621: A Game-Changer in Tokenized Investment Fund Management

Alvara Leads with Implementation of New ERC-7621 Token Standard

Lockbit ransomware gang disrupted by international operation

Ransomware group LockBit is disrupted by a global police operation that includes 2 arrests

Rhode Island-based Attorney John Deaton Announces Republican Run Against Sen. Elizabeth Warren

R.I. attorney John Deaton moves to Swansea, announces run against Sen. Elizabeth Warren

Bitcoin & Crypto Fund Management Revolution with ERC-7621 Token Standard

Alvara Protocol Leverages New ERC-7621 Standard for Fund Management Revolution

More like this

Erc-7621: A Game-Changer in Tokenized Investment Fund Management

Alvara Leads with Implementation of New ERC-7621 Token Standard

Lockbit ransomware gang disrupted by international operation

Ransomware group LockBit is disrupted by a global police operation that includes 2 arrests

Rhode Island-based Attorney John Deaton Announces Republican Run Against Sen. Elizabeth Warren

R.I. attorney John Deaton moves to Swansea, announces run against Sen. Elizabeth Warren