USD Fell its Two-Month High Ahead of US Inflation Data

USD Fell its Two-Month High Ahead of US Inflation Data

On Friday, June 25, the USD fell to its two-month high in early European trade as traders await the release of US inflation data.

This is to get hints over the future of the Federal Reserve policy.

The US Dollar Index which trails the greenback in opposition to its other six rival currencies plunged 0.1% at 91.763.

This is lower than its last week’s high of 92.408 but above the levels below 90 that happened last May.

It received a jolt higher last week following the Fed’s median forecast for interest rate hikes.

However, the subsequent statements of its Chairman Jerome Powell over the price surge pressures being temporary soothe market nerves.

This is over the potentiality for the central bank’s early move to implement its monetary policies.

Meanwhile, the USD/JPY traded flat at 110.88 as the EUR/USD and the AUD/USD jumped 0.1% to 1.1939 and 0.1% to 0.7591, respectively.

Moreover, the New Zealand currency crawled back over its 200-day moving average to $0.7076 even though it stayed above 74 cents on its February highs.

Elsewhere, The trading on GBP/USD rose at 1.3928 despite the Bank of England knocking it on Thursday due to the absence of rate hike hints.

In addition, the USD/MXN hopped 0.2% to 19.884 as it rebounded from Thursday’s low following Mexico’s central bank increase in interest rates.

Furthermore, the South Korean won reached its strongest level in over a week at 0.00089.

Meanwhile, the Thai baht extended its rebound from a one-year low at 0.031.

An analyst said that several Asian currencies have prompted exporters to sell dollars for local banknotes.

US Inflation Data

Later on Friday, the US inflation data will be released to offer the latest indication of how much pressure the Fed is aimed to move.

In addition, the labor market figures are due next week which leaves traders who are unwilling to sell the US dollar too hard in case it bounces again soon.

As of the moment, the market interest eyes the release of the core personal consumption expenditures index.

This is seen as the Fed’s chosen gauge of inflation and it is expected to reveal year-on-year gains of 3.4% in May.

This forecast climbs from the previously recorded 3.1% last month.

Meanwhile, an analyst said that the Fed seems to be divided into two sides even though most of the coalition sticks to Powell’s statements that the price surge will soon fade.