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Easing Inflation Firms Rate Peak Bets As Dollar Falls To 15-Month Low

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Easing Inflation Firms Rate Peak Bets As Dollar Falls To 15-Month Low

(CTN News) – Due to easing inflation, the dollar hovered at 15-month lows on Friday after taking a steep plunge overnight.

As of early Asian hours, the dollar index, which measures the US currency against six major rivals, stood at 99.71, its lowest level since April 2022. Currently, the index is on track for its worst week since November.

Data released on Thursday showed that US producer prices barely increased in June and that producer inflation increased by the smallest amount in nearly three years.

As evidence mounts that the world’s largest economy has entered a phase of easing inflation, consumer prices rose modestly last month.

According to Carol Kong, currency strategist at Commonwealth Bank Of Australia in Sydney, markets are generally pleasant with the lower inflation data, since lower inflation combined with a still resilient labour market support the narrative that the US economy will undergo a soft landing.

In spite of this, we remain convinced that the US will enter recession later this year as a result of past and potential future interest rate hikes.”

The CME FedWatch tool shows that markets are pricing in a 92% chance of a 25 basis point rate hike by the Fed later this month, but no more for the remainder of the year.

Despite a decrease in job growth, the number of Americans filing new unemployment claims unexpectedly decreased last week.

The data on weekly jobless claims and producer prices indicate a soft landing, according to Ryan Brandham, head of global capital markets at Validus Risk Management.

As a result of the jobs data, the Fed will be more confident in raising rates later this month.

Even though the recent trend of lower inflation may be encouraging, it is unlikely to be sufficient to change the decision of the committee.”

Nevertheless, Fed officials remain cautious, with Federal Reserve Governor Christopher Waller insisting he is still not ready to declare US inflation under control and favors further rate increases this year.

As a result of Michele Bullock’s appointment as governor of Australia’s central bank, which is undergoing a sweeping reorganization, the Australian dollar was down 0.16% to $0.688.

After touching a new 16-month high of $1.1229 in Asian hours, the euro retreated to $1.1222, while sterling traded at $1.3119, down 0.11% on the day.

On Thursday, the pound crossed the $1.30 mark for the first time since April 2022.

Against the dollar, the Japanese yen strengthened by 0.23% to 137.71 and is set to record its best week since January.

Overnight, bitcoin reached near two-month highs of $31,818 as it rose 0.03% to $31,367.56.

The price of Ethereum last rose by 1.4% to $2,014.10.

In a recent ruling, a US judge ruled that the sale of the XRP token on public exchanges was not in violation of federal securities law.

Following a 76% spike on Thursday, XRP tokens eased 7% in early Asian hours to trade at $0.7546.

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Salman Ahmad is a seasoned writer for CTN News, bringing a wealth of experience and expertise to the platform. With a knack for concise yet impactful storytelling, he crafts articles that captivate readers and provide valuable insights. Ahmad's writing style strikes a balance between casual and professional, making complex topics accessible without compromising depth.

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