EUR/USD
The euro slid to eight-month lows against the dollar on Tuesday after data revealed consumer price inflation in the U.S. met expectations in June, which sent investors betting the Federal Reserve may raise interest rates sooner in 2015 than later, especially if the labor market continues to improve. The Labor Department reported earlier that the U.S. consumer price index rose 2.1% in June, unchanged from the previous month and in line with forecasts, which drew applause for the dollar. On a month-over-month basis, U.S. consumer prices were up 0.3% after a 0.4% increase in May, also in line with expectation.
GBP/USD
The pound edged lower against the U.S. dollar on Tuesday, as upbeat U.S. home sales data lent support to the greenback and markets continued to monitor developments in Ukraine and the Middle East. The National Association of Realtors said that existing home sales increased 2.6% to 5.04 million units last month from 4.91 million in May. Analysts had expected existing home sales to rise 2% to 4.97 million units in June. The data came after the U.S. Department of Labor said that consumer prices rose by 0.3% last month, meeting estimates, after rising 0.4% in May. Consumer prices rose at an annualized rate of 2.1% in June, in line with expectations and unchanged from May.
USD/JPY
The yen edged lower against the euro and the dollar on Tuesday as concerns over geopolitical tensions eased, but losses were held in check as investors remained wary. Investors were continuing to eye geopolitical concerns as tensions between Russia and the West remained high in the wake of the downing of a Malaysian airliner in eastern Ukraine late last week, while Israel’s ground offensive in Gaza was also in focus. The euro was also higher against the yen, with EUR/JPY rising 0.13% to 137.29 from 137.10 on Monday. In contrast, Federal Reserve Chair Janet Yellen indicated last week that interest rates may rise sooner if the economy continues to improve.
USD/CAD
The U.S. dollar was little changed against its Canadian counterpart on Tuesday, after U.S. consumer price inflation data came out broadly in line with expectations, while investors continued to monitor developments in Ukraine and the Gaza Strip. In a report, the U.S. Department of Labor said that consumer prices rose by 0.3% last month, meeting estimates, after rising 0.4% in May. consumer prices rose at an annualized rate of 2.1% in June, in line with expectations and unchanged from May. Consumer prices, excluding food and energy costs, inched up 0.1% last month, compared to expectations for a 0.2% gain. Core consumer prices rose 0.3% in May.
