🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Dollar Edges Higher; Key Inflation Data Due

Published 01/10/2021, 08:20
© Reuters.
EUR/USD
-
GBP/USD
-
USD/JPY
-
AUD/USD
-
USD/CZK
-

By Peter Nurse

Investing.com - The dollar pushed higher in early European trade Friday, on course for its best week since June, as traders position for a tighter U.S. monetary policy in the near future.

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 94.315, near its highest level since September 2020 having gained over 1% so far this week, the largest weekly rise since late June.

USD/JPY fell 0.1% to 111.16, with the yen boosted by Japan's business mood improving for a fifth straight quarter in September. EUR/USD edged lower to 1.1579, near its lowest levels since July 2020, GBP/USD fell 0.2% to 1.3449, just above a 9-month low, while the risk sensitive AUD/USD fell 0.4% to 0.7198, just above one-month lows.

Foreign exchange traders have started positioning for the Federal Reserve to begin tapering its asset purchases before the year end, and for interest rate hikes starting in the second half of 2022. 

Fed chief Jerome Powell stated Wednesday that resolving "tension" between high inflation and still-elevated unemployment is the most urgent issue facing the central bank right now.

U.S. second-quarter growth was revised slightly higher on Thursday, and the focus Friday will be on the release of the core personal consumption expenditures price index, the inflation measure the Federal Reserve uses to set policy.

This is expected to rise 0.2% in August and 3.6% year over year, unchanged on an annual basis from July, which was the highest level since May 1991.

Elsewhere, USD/CZK traded flat at 21.8660, after the crown posted sharp gains on Thursday on the back of the Czech National Bank hiking interest rates by 75 basis points, its biggest interest rate hike since 1997, after a spike of inflation. 

The increase was larger than the already big 50-basis point move that markets had priced in. It lifted the bank's two-week repo rate to 1.50%.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.