Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar Down Over Higher-Than-Expected Inflation Data

Forex Jun 11, 2021 12:36AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Gina Lee

Investing.com – The dollar was down on Friday morning in Asia after the U.S. posted higher-than-expected inflation data in May.

The US Dollar Index that tracks the greenback against a basket of other currencies edged down 0.11% to 89.980 by 12:14 AM ET (4:14 AM GMT).

The USD/JPY pair inched up 0.08% to 109.40, with a new analysis saying another COVID-19 surge could come in Japan with or without the Olympics.

The AUD/USD pair inched up 0.04% to 0.7755 as Australia is working on a quarantine-free travel corridor with Singapore. Across the Tasman Sea, the NZD/USD pair inched down 0.01% to 0.7195.

The USD/CNY pair edged down 0.10% to 6.3865.

The GBP/USD pair inched up 0.06% to 1.4182. Investors will be monitoring the opening of the Group of Seven leaders’ summit in the U.K. on Friday.

In the U.S., data released on Thursday said that the consumer price index (CPI) jumped 5.0% year-on-year in May, above 4.7% in forecasts and 4.2% growth during the previous session. It posted the sharpest rise in over a dozen years. Its core CPI increased 3.8% year-on-year and 0.7% month-on-month in May, both above forecasts prepared by Investing.com.

However, investors are betting that price pressures are not going to force the U.S. Federal Reserve Bank to hike interest rates sooner than expected due to hefty contributions from short-term rises in airline ticket prices and used cars.

"It basically fit the Fed script, that we'd get a burst but it's going to be temporary… this report is consistent with that, it doesn't argue against it. I think the market needed something that argued against it to push the dollar higher," Westpac currency analyst Imre Speizer told Reuters.

Investors now await the Fed’s meeting next week, although investors are aligning with the Fed’s view that inflationary pressures are temporary and that the central bank will keep its current dovish monetary policy unchanged for a while.

It is expected that the central bank will announce a plan for reducing bond buying, but it isn't forecast to begin until 2022, according to a Reuters poll of economists.

"What we're seeing is a market that believes in the Fed…we're going to get tapering… but it's going to get done a such a snail's pace." Chris Weston, head of research at broker Pepperstone, told Reuters.

Across the Atlantic, the European Central Bank president Christine Lagarde on Thursday pledged to deliver faster bond buying as the central bank handed down its policy decision.

“A sustained rise in market rates could translate into a tightening of wider financing conditions… such a tightening would be premature and would pose a risk to the ongoing economic recovery,” Lagarde said.

Dollar Down Over Higher-Than-Expected Inflation Data
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
The Wise
The Wise Jun 13, 2021 10:06AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The US Department of Defense is concerned that hackers could take down the US financial system and is working with Wall Street traders to figure out a way to protect against the threat.The Pentagon’s research arm, the Defense Advanced Research Projects Agency (DARPA), is consulting with dozens of traders and quantitative hedge fund managers to understand the extent of the damage hackers could cause to the US financial system, the Wall Street Journal reporthttps://www.rt.com/usa/407036-pentagon-hackers-crash-stock-market-darpa/
The Wise
The Wise Jun 13, 2021 10:03AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
And the Dollar is up? Who's hacked the Global markets? Gold down?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email