New York, July 15 (BNA): The US dollar rebounded on Friday after a sharp decline in the past few days, as investors consolidated losses ahead of the weekend, but its path remained bearish as the Federal Reserve believed it was nearing an end. The cycle of raising interest rates amid falling inflation.
According to Reuters, it is still on track to achieve its largest weekly decline since November against a basket of six major currencies.
The dollar index rose 0.2% to 99.923, after touching a 15-month low of 99.574 earlier. The index fell 2.3 percent during the week.
The weekly decline was exacerbated by US June producer and consumer inflation data which showed easing price pressures.
Data on Thursday showed that U.S. producer prices barely rose last month and the annual increase was the smallest in nearly three years, a day after a report indicated consumer prices rose modestly last month.
“It looks like the US dollar recovery today is mostly a correction,” said Helen Geffen, forex trader, at Monex USA in Washington.
“Markets may have overreacted a bit to Wednesday’s CPI numbers. Yesterday’s Fed Chair and Fed Chair’s speech reinforced that the Fed is still looking to go twice as high, even if markets don’t quite believe it.”
Governor Christopher Waller said he is not ready to call for a clear decision on inflation in the United States, as he favors an interest rate hike this year.
Markets are still rooming for a 95% chance 25 basis Investors have been betting the dollar lower for months, with short positions more than doubling over the month to July 7, according to data from the CFTC, although they remained far from levels in a year. 2021.
Against dollar weakness, the euro touched a 16-month peak of $1.1245 in Asian hours before settling at $1.1229.
Against the Swiss franc, the dollar rose 0.4% to 0.8621 franc, up from an eight-year low of 0.8568. The dollar was on track for its biggest weekly percentage loss against the franc since December last year.
The dollar rose 0.5 percent to 138.805 yen, but it was on its way to its worst week since January.
Monex said: “In the near term, we may see a slight strength in the dollar, but it remains to be seen on July 26 (the date of the Fed meeting) if the Fed can convince traders that it will hike twice more and not just once.” Grant.
The Swedish krona fell 0.5% against the dollar to 10.2395 per dollar, away from a two-month high hit on Thursday, on the back of data showing that consumer inflation is decelerating at a slower rate than expected. The Swedish currency is still on track for its biggest weekly gain since March 2009, up 5.2%.
Elsewhere, the Australian dollar fell 0.8% to $0.6837 after Michelle Bullock was appointed head of the Reserve Bank of Australia on Friday, becoming the first female governor as she undertakes a sweeping reorganization.
CME’s FedWatch tool showed a point increase from the Fed this month, but not more for the rest of the year.
Rial
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