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 Edges Lower After CPI Data; Fed Seen on Course

ForexJun 11, 2021 01:49AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Peter Nurse

Investing.com - The dollar edged lower in early European trade Friday, as traders wagered that a hefty rise in U.S. consumer prices would not be enough to immediately jolt the Federal Reserve from its ultra easy monetary policy stance.

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 89.990, marginally lower for the week.

USD/JPY rose 0.1% to 109.40, GBP/USD climbed 0.1% to 1.4179, while the risk-sensitive AUD/USD was marginally higher at 0.7753. 

Data released on Thursday saw the U.S. consumer price index jumping 5.0% year-on-year in May, the sharpest rise in more than a dozen years, up 0.6% on the month, while core CPI, which excludes volatile food and energy prices, increased 3.8% year-on-year and 0.7% month-on-month in May.

The foreign exchange market had been wary of strong inflation numbers all week, and this exceeded expectations. However, the response has been muted as the CPI release included hefty contributions from short-term rises in airline ticket prices and used cars, all of which played into the Fed narrative of the surge in inflation being a temporary phenomena.

This belief in Fed thinking can clearly be seen in the bond market, as the yield on the benchmark 10-year U.S. Treasury note fell to a three-month low of 1.44%. When investors were worried about inflation in March, the yield had spiked to almost 1.78%.

Attention now turns to next week’s meeting of the FOMC, but there are no longer any great expectations of a shift in rhetoric over the need to taper stimulus.

Elsewhere, EUR/USD rose 0.2% to 1.2188, with ECB chief Christine Lagarde’s renewed pledge to deliver faster bond buying, despite improvements in the central bank’s growth forecasts, keeping gains by the single currency in check.

“The main takeaway from the ECB is that accommodation is here to stay and, like the Fed, it wants to be data rather than forecast driven,” said Kathy Lien, an analyst at BK Asset Management.

Later Friday sees the Russian central bank meet to decide on the appropriate level for interest rates in the country following an unexpectedly high inflation release earlier in the week.

Annual consumer inflation accelerated to 6.0% in May, according to data released Monday (NASDAQ:MNDY), way above the central bank’s target of 4%, and the highest since October 2016.

Interest rates were at 10% then, but are now at 5%, prompting most economists polled to expect a hike by 50 basis points, at 6:30 AM ET (1030 GMT), to 5.5%.

At 2:55 AM ET, USD/RUB traded 0.7% lower at 71.8027.

 

Dollar Edges Lower After CPI Data; Fed Seen on Course
 

Related Articles

Bitcoin tumbles 5.5% to $53,436
Bitcoin tumbles 5.5% to $53,436 By Reuters - Dec 03, 2021 1

(Reuters) - Bitcoin plunged 5.5% to $53,435.9 at 22:04 GMT on Friday, losing $3,112.06 from its previous close. Bitcoin, the world's biggest and best-known cryptocurrency, is...

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 (3)
Tiar Winata
Tiar Winata Jun 11, 2021 6:31AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
wow bad news..
Adnan Butt
Adnan Butt Jun 11, 2021 4:37AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
come
Waren Matos
Waren Matos Jun 11, 2021 3:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wich coins should i invest
Ali Mifzal
Ali Mifzal Jun 11, 2021 3:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Which way is bitcoin heading?
Timothy Ukpon
Timothy Ukpon Jun 11, 2021 3:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Ali Mifzal Litecoin or Euterum
Timothy Ukpon
Timothy Ukpon Jun 11, 2021 3:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Ali Mifzal is crashing take note
Davis George
Davis George Jun 11, 2021 3:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Davis George
Davis George Jun 11, 2021 3:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
 
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
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email