Business

Dollar picks up as U.S. inflation figures wait for Fed hints – SABC News

The dollar was at a two-week high on the euro on Friday, ahead of inflation figures that should lead the central bank to tighten its policy, and after the European Central Bank said it would launch its rate hike campaign next month.

Growth in US nuclear prices is expected to cool slightly, data later in the day will show.

Such an outcome would provide some reassurance for those hoping that decades of high inflation peaked in March and that the decline in April was not a one-off.

This could give the central bank some leeway to raise its policy rate with less aggression later in the year as it seeks to curb inflation without bringing the economy into recession.

In the near future, markets expect the central bank to announce next week one of three three-point series of interest rate hikes in a row, which has raised the dollar in recent months.

The dollar index, which measures the dollar against six peers, remained stable at 103.3 after rising 0.7% overnight.

It has risen by 1.1% this week, which is its biggest percentage increase since last week of April.

The index “appears to have sailed a more determined and hawkish ECB relatively easily.

“Their plans to raise interest rates by 25 basis points in July and September and present a possible larger increase were obviously not worse than expected,” said experts at Westpac.

Analysts said the index was expected to be in the range of 101 to 105, with scope to test the higher end if data on the US consumer price index and the Fed meeting next week underline the possibility of a higher US yield.

The euro hit $ 1.0611 in early Asian trading, the lowest since May 23, after losing 0.92% to the dollar on Thursday after a volatile ECB-driven meeting.

The central bank of the 19 countries using the euro said it would end quantitative easing on July 1 and then raise interest rates by 25 basis points on July 21.

The ECB announced a higher rate hike in September, unless the inflation outlook improves in the interim period.

The euro also lost 0.55% against the pound sterling overnight and 0.86% against the Japanese yen, a seven-and-a-half-year high.

The yen was unable to reach any level on the foreign exchange bench, trading at $ 134.16 at the start of Asian trading on Friday, about a 20-year low recently.

The Central Bank of Japan, unlike its main peers, has repeatedly committed itself to keeping interest rates low, sending the yen down to 135.20 on January 31, 2002.

Future crime that would be the lowest since October 1998.

The risky Australian dollar remained under pressure at $ 0.709, down 1.65% this week, due to a reduction in market inequality, but the pound sterling was also lower against the dollar at $ 1.2486.

Bitcoin was at $ 29,800, after failing in its latest attempt to sustain over $ 30,000, the level it has been trading since last month.

Dollar picks up as U.S. inflation figures wait for Fed hints – SABC News

Source link Dollar picks up as U.S. inflation figures wait for Fed hints – SABC News

Back to top button