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12/07/24
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USD At About 1-Month Low on Soft CPI Data Spurring Rate Cut Bets
On Friday, the US dollar was steady against a basket of currencies after weaker-than-expected inflation data resulted in the currency dropping to one-month lows, amid increasing bets that the Federal Reserve would cut interest rates in Sept.
Wider foreign exchange markets were cautious amid Japanese yen volatility. On Thursday, the Japanese currency strengthened substantially, which led to speculation over Japanese government intervention in currency markets.
The euro was virtually unchanged versus the dollar as the German wholesale price index for June was slightly weaker than expected. The EUR/USD pair was steady after on Thursday soaring to a more than one-month high versus the dollar.
The British pound was also unchanged, and the GBP/USD pair moved little after it on Thursday rallied to a close to one-year high versus the dollar. The pound was also bolstered by Thursday’s data which showed the economy in the UK in May grew more than expected.
On Friday the dollar index was steady after overnight dropping to a one-month low.
The currency was hit by weaker-than-expected CPI data, which showed inflation in June eased slightly more than expected.
According to CME’s Fedwatch tool, traders priced in an 83.4% probability the Fed would cut rates in Sept., compared to 64.7% last week.
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