Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

Dollar on the rise ahead of key inflation data

Published 08/07/2023, 03:28 AM
© Reuters.
EUR/USD
-
GBP/USD
-
USD/JPY
-
USD/CNY
-
DXY
-

Investing.com - The U.S. dollar gained in early European trade Monday, rebounding from losses after Friday’s payrolls data ahead of this week’s release of inflation data from the world's two largest economies.

At 03:05 ET (07:05 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher at 102.082, climbing away from Friday's low of 101.73.

Dollar rebounds ahead of key inflation data

The U.S. economy added fewer jobs than expected in July, data on Friday showed, resulting in the dollar falling to a one-week low against a basket of currencies.

However, the jobs report also showed solid wage gains and a decline in the unemployment rate, indicating that the labor market remains tight and inflationary pressures remain.

With the Federal Reserve clearly looking at the incoming data ahead of September’s policy meeting, the attention now turns to Thursday’s U.S. inflation data release for guidance.

Lower numbers would make it more likely that Fed policymakers will hold off raising interest rates at their upcoming September meeting after a quarter-percentage-point hike last month, but expectations are for core inflation to have risen 4.7% on an annual basis in July.

Yuan weak amid deflation concerns

USD/CNY rose 0.7% to 7.1923, with the yuan weak ahead of Tuesday’s Chinese inflation data, with consumer inflation set to fall 0.5% on an annual basis in July, while producer inflation is likely to have contracted further.

Markets were also focused on more cues from the Chinese government on its plans to stimulate economic growth after officials offered few concrete details on their planned spending measures.

German industrial production slumps

EUR/USD fell 0.3% to 1.0979 after German industrial production slumped 1.5% on the month in June, a dramatic fall from the revised slip of 0.1% the prior month.

The European Central Bank hiked interest rates earlier this month, but signs that the German economy, the largest in the eurozone, is still struggling could prompt the ECB policymakers to call a halt to its tightening cycle in September.

U.K. house prices fall again

GBP/USD fell 0.2% to 1.2724 after data from mortgage lender Halifax showed that British house prices fell in July for the fourth time in a row in month-on-month terms, dropping by 0.3% from June and in year-on-year terms they were down by 2.4%.

The U.K. is to release second quarter GDP data on Friday which is expected to tick fractionally higher, indicating that the overall economy remains all but stagnant.

Elsewhere, USD/JPY rose 0.4% to 142.34, even as some members of the Bank of Japan warned that inflation could overshoot expectations this year.

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.