Last: 
On Friday, the dollar fell to a one-year low against a basket of currencies, while the euro hit a one-year peak, as traders raised expectations that the U.S. Federal Reserve’s interest rate hike cycle would soon end, given signs of cooling inflation.
.webp)
On Thursday, data released by the U.S. Department of Labor showed that the producer price index (PPI) fell the most in nearly three years last month. This came a day after inflation data showed a moderation in consumer prices. The U.S. dollar fell again on Friday, with the DXY index, which measures the greenback against a basket of other currencies, falling to a one-year low of 100.78. The index is currently down 0.15% at 100.82 and is heading for a weekly decline of more than 1%, its sharpest decline since January. Meanwhile, the euro EURUSD hit a fresh one-year peak of $1.1075, surpassing its previous high on Thursday. The common currency (euro) is currently up 0.2% at $1.1070. It is heading for a weekly gain of more than 1.5%. According to National Bank of Australia chief forex strategist Ray Attrill "The easiest way to express a negative view on the dollar is in the euro." "The significant downside surprise in the US PPI has given people a little more confidence in the view that the Fed is (soon) done ... and (strengthens) the belief that inflation will allow the Fed to cut rates before the end of the year." This could reinforce the negative view on the US dollar.
Meanwhile, the British pound (GBPUSD) hit a 10-month high of $1.2545 and is currently up 0.14% at $1.25405. The currency market is currently pricing in a 69% chance that the US Fed will raise interest rates by 25 basis points next month. However, the market is also pricing in the possibility of a rate cut from July through to the end of the year. It is expected to hover just above 4.3% in December. (FEDWATCH)
In addition, signs that global inflationary pressures are easing are emerging, particularly with an unexpected surge in exports from China. In March, Chinese exports rose 14.8% from a year earlier, surprising economists who had forecast a 7.0% decline in a Reuters survey. Upbeat data from China, coupled with a strong jobs report in Australia for March, has kept the Australian dollar under control. AUDUSD continued to be supported around $0.6783 on Friday after rising 1.3% in the previous session on upbeat economic data. The Australian and New Zealand dollars are often seen as liquid proxies for the Chinese yuan. National Bank of Australia head of forex strategy Ray Attrill said, "It's almost a perfect storm of positives for the Aussie. Starting with a good jobs number in Australia, followed by a very good trade number in China."
In Asia, the Japanese yen USDJPY edged up to 132.47 per dollar, while the offshore yuan USDCNH gained more than 0.5% to 6.8327 per dollar. The New Zealand dollar NZDUSD also rose 0.19% to $0.6309 after jumping 1.3% on Thursday. All of these currencies are influenced by various factors affecting the global currency market and the current risk sentiment in the market.
|
also read : US Dollar Under Pressure Due to Weak Economic Data |
Warning!
This analysis is based on fundamental and technical views from trusted sources, not advice or invitation. Always remember that this content is intended to enrich the reader's information. Always use independent research first regarding other forex information to be used as a reference in your trading.
Register Here To Get Maximum Trading Profit, Make It A Profit Opportunity!
