Dollar recovers a touch, inflation data boosts Norway’s crown, hurts China’s yuan

Singapore, July 10 (BNA): The dollar regained ground on Monday, recovering in part from a surprise reaction to Friday’s data showing that job gains in the United States were the smallest in two-and-a-half years, while disappointing inflation figures in China weighed. On the yuan and agents.

The dollar index, which measures the greenback against a basket of major peers, rose 0.15% to 102.44 after falling 0.87% on Friday, after US non-farm payrolls increased 209,000 in June, missing market expectations for the first time in 15 months, Reuters reported. .

While details in the employment report reflecting strong wage growth continue to confirm the market’s pricing in another rate hike later this month, the data helped reassure markets that an end to the Federal Reserve’s rate hike program is close, at least until Had once expected cuts. Later in 2023 now seems unlikely.

The dollar’s decline on Friday and recovery on Monday were broadly based. The euro last fell 0.14% to $1.0953 after a 0.7% jump on Friday and the British pound fell 0.25% to $1.2809 after rising 0.79% in the previous session to a 15-month high of $1.2850.

The dollar rose as much as 0.55% against the Japanese yen and rose 0.06% last time at 142.31 after falling 1.3% on Friday.

The dollar/yen pair is particularly sensitive to US yields, which fell after the data, as interest rates in Japan are holding steady near zero.

“It’s kind of a relief from the overreaction we saw on Friday. There was an overreaction to the non-farm payrolls report, so it doesn’t surprise me that the yen is weak today,” said Joseph Capurso, head of international and sustainable economics. in the Commonwealth Bank of Australia.

For markets focused on the outlook for central bank policy, particularly the US Federal Reserve, focus now turns to US inflation data due on Wednesday, with expectations for core CPI rising 5% yoy in June.

Norway’s crown was boosted after data showed that core inflation continued to rise in June, hitting a new record. The euro fell last 0.88 percent in front of the crown at 11.544, its lowest level since mid-June.

However, the situation is different in China, where Monday’s figures showed that China’s factory gate prices fell at the fastest pace in seven-and-a-half years in June and consumer inflation was at its slowest since 2021, boosting hopes for further support measures. from the Chinese authorities.

The weak data sent the Australian and New Zealand dollars lower, which are often used as liquid proxy for the Chinese yuan.

The Australian dollar fell 0.66% to $0.6648, while the New Zealand dollar fell 0.45% to $0.6181.

The dollar rose by 0.1% against the external yuan, to 7.239 per dollar.

“The weaker consumer price index continues to reflect weak domestic demand, while the producer price contraction confirms pressure on factories,” said Christopher Wong, currency analyst at OCBC.

“(It is) basically saying that China needs stimulus support.”

Rial