The dollar's value dropped to a 15-month low, signaling speculations of the Federal Reserve nearing the end of its rate hike cycle due to declining inflation. Reuters' report indicates that the dollar index, which measures the U.S. currency against six major rivals, reached its lowest point since April 2022 at 99.71 during early Asian hours. The ongoing decline in the dollar index suggests that this week may be the worst performance since November. Easing Inflation and Its Impact on the Dollar In June, U.S. producer prices experienced minimal growth, and the yearly increase in producer inflation was the smallest in almost three years, according to recent data released on Thursday. These findings were followed by modest consumer price growth, further supporting the notion that the world's largest economy is entering a phase of easing inflation. Currency strategist Carol Kong, from the Commonwealth Bank of Australia in Sydney, stated, "Markets are generally pleased with the lower inflation data, as it aligns with the resilient labor market, creating a narrative of a soft landing for the U.S. economy." However, Kong maintains the belief that the United States may face a recession later in the year due to the impact of past and potential future interest rate hikes. Market Expectations and Federal Reserve Outlook Current market expectations indicate a 92% likelihood of a 25 basis point hike from the Federal Reserve later this month, as shown by the CME FedWatch tool. However, no further hikes are anticipated for the remainder of the year. Recent data on weekly jobless claims and producer prices suggest a supportive environment for a soft landing, according to Ryan Brandham, head of global capital markets, North America, at Validus Risk Management.Federal Reserve Governor Christopher Waller expressed caution, stating that he is not ready to declare all clear on U.S. inflation and is in favor of additional rate hikes this year. Despite the encouraging trend of declining inflation, it is unlikely to be sufficient to sway the committee's decision. Global Currency Movements The Australian dollar experienced a slight decline of 0.16% to $0.688 following Michele Bullock's appointment as head of Australia's central bank, making her the first female governor as the bank undergoes a comprehensive reorganization. The euro reached a fresh 16-month high of $1.1229 during Asian trading hours before slightly retreating to $1.1222, while the pound traded at $1.3119, marking a 0.11% decrease for the day. Thursday saw the pound surpass $1.30 for the first time since April 2022. The Japanese yen strengthened by 0.23% to 137.71 per dollar, potentially achieving its most successful week against the dollar since January. Cryptocurrency Market Highlights Bitcoin experienced a marginal increase of 0.03% to $31,367.56, reaching near two-month highs of $31,818. Ethereum rose by 1.4% to $2,014.10. A U.S. judge ruled that Ripple Labs did not violate federal securities law by selling its XRP token on public exchanges.In summary, the dollar's decline to a 15-month low suggests that the Federal Reserve may be nearing the end of its rate hike cycle due to easing inflation. The market remains cautiously optimistic, while speculations of a U.S. recession persist. Global currency movements reflect the impact of these developments, while cryptocurrencies demonstrate mixed performances.

istockphoto-1401715999-1024x1024-transformed (1).jpeg

Stay updated as the dollar reaches a 15-month low due to easing inflation, sparking speculation about a potential rate peak. Get insights into the evolving market dynamics.

Dollar at 15-Month Low as Inflation Eases, Fuels Speculation of Rate Peak

<h2>Key Highlights</h2> <ul><li>Federal Reserve officials indicate that the cycle of rate hikes is approaching its conclusion.</li><li>The dollar experiences a decline, reaching a three-week low against the yen.</li><li>The market's attention shifts to the release of U.S. inflation data on Wednesday.</li><li>Following the publication of inflation data, the Norwegian crown emerges as the top gainer in the foreign exchange market.</li><li>Chinese inflation data exerts pressure on the yuan, although it remains relatively stable compared to the dollar.</li></ul> According to reports from Reuters, the US dollar plunged to a three-week low on Monday following comments from Federal Reserve officials that reinforced market expectations of an imminent end to the tightening cycle by the US central bank. Despite Friday's data revealing the smallest job gains in 2-1/2 years, the Fed is widely anticipated to raise interest rates by another 25 basis points this month. The expected rate hike in July would come after a pause by the Fed in June. Various Fed officials, led by San Francisco Fed President Mary Daly, indicated on Monday that while the central bank may need to raise interest rates further to combat persistently high inflation, the current monetary policy tightening cycle is nearing its conclusion. In afternoon trading, the dollar index, which tracks the US currency against major peers, slipped 0.3% to 101.98, reaching a three-week low. The euro climbed to three-month highs against the dollar, touching $1.0997 before settling at $1.0995, reflecting a 0.2% increase. Against the yen, the dollar dropped to its lowest level since June 21, reaching 141.32 yen. It was last down 0.6% at 141.335. Following weaker-than-expected US nonfarm payrolls data for June, which missed market expectations for the first time in 15 months, the greenback slid nearly 1.3% on Friday. Erik Nelson, macro strategist at Wells Fargo in London, stated, "The weaker pressure on the dollar has been hard to reconcile from a relative rates and growth standpoint. U.S. growth has outperformed expectations, while Europe and China have underperformed. I think the U.S. economy is stronger than we give it credit for." While Friday's employment report highlighted consistently strong wage growth, market expectations of a further rate hike later this month remained intact. Anticipated rate cuts in 2023, which were once expected, now seem unlikely. Attention now turns to US inflation data scheduled for release on Wednesday, with expectations for core CPI to show a 5% annual increase in June. In other currency news, the Norwegian crown, which has been the second-weakest performing currency in the G10 this year, strengthened following data that revealed continued rise in core inflation in June, reaching a new record. Consequently, the Norwegian crown firmed against both the dollar and the euro. The dollar was last down 1% at 10.493 Norwegian crowns, while the euro dropped nearly 1% to 11.5363 Norwegian crowns. The Chinese yuan experienced a decline against the dollar due to weak inflation figures in the world's second-largest economy. Data released on Monday showed that factory-gate prices fell at the fastest pace in 7-1/2 years in June, while consumer inflation reached its slowest rate since 2021. These numbers fueled hopes for additional support measures from Chinese authorities. The US dollar remained relatively unchanged against the offshore yuan at 7.230. The weak Chinese data had a negative impact on the Australian and New Zealand dollars, often used as liquid proxies for the Chinese yuan. The Aussie dollar fell by 0.2% to US$0.6677, while the New Zealand dollar reversed losses to trade 0.1% higher at US$0.6215.

Find out the implications of the Fed's rate hikes as the US Dollar tumbles.

US Dollar at Three-Week Low: Fed's Rate Hikes End

Fed's Rate Hikes: US Dollar Drops to Three-Week Low

Key Highlights <ul><li>Citigroup downgrades U.S. stocks to "neutral" from "overweight"</li><li>China faces deflationary pressure as consumer prices weaken</li><li>Carl Icahn separates personal loans from IEP's share price</li><li>Indexes show mixed results: Dow rises 0.58%, S&amp;P up 0.22%, Nasdaq slips 0.18%</li></ul> According to Reuters reports, on Monday, the S&amp;P 500 and the Dow rebounded, recovering from losses experienced last week. Investors are now eagerly anticipating a crucial inflation report and the comments from several Federal Reserve officials scheduled for this week. These updates will provide insights into the central bank's approach to interest rates. All eyes are on the upcoming U.S. inflation data, expected to be released on Wednesday. This data will play a significant role in shaping the Federal Reserve's interest rate decision later this month. Economists surveyed by Reuters predict that consumer price growth likely slowed down in June. Thomas Hayes, chairman at Great Hill Capital, described the current situation as an "information vacuum" until Wednesday. Citigroup strategists downgraded U.S. stocks to a "neutral" rating, emphasizing that megacap growth is due for a pullback and warning about potential U.S. recession risks. Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley, commented, "This week has the potential to tip short-term momentum either way, depending on how traders react to inflation data (CPI and PPI) and the first batch of Q2 earnings." This week marks the beginning of the second-quarter earnings reporting period, and investors will be assessing the impact of tight monetary conditions and concerns about an impending economic slowdown on businesses. According to Refinitiv data, earnings for S&amp;P 500 constituents are expected to decline by 5.7% in the second quarter. Last week, Wall Street's main indexes ended lower after a jobs report indicated a decline in unemployment for June. However, higher-than-anticipated wage growth suggested a strong labor market. Traders still anticipate a 25 basis points rate hike by the U.S. central bank later this month. However, there is divided opinion on the trajectory of rate hikes for the rest of the year. Big banks such as JPMorgan Chase and Citigroup saw slight gains ahead of their earnings reports scheduled for Friday. At 10:03 a.m. ET, the Dow Jones Industrial Average was up 196.47 points or 0.58% at 33,931.35, the S&amp;P 500 was up 9.58 points or 0.22% at 4,408.53, and the Nasdaq Composite was down 24.73 points or 0.18% at 13,635.98. Among the 11 major S&amp;P 500 sectors, seven advanced in early trading, with industrials leading the gains with a rise of 1.3%. Home Depot was one of the top gainers on the Dow, climbing 1.8% after Jefferies raised its price target on the home improvement retailer. Meta Platforms added 0.7% after founder Mark Zuckerberg announced that 100 million users have signed up on the conglomerate's latest social media platform, Threads. However, most other megacap growth and technology stocks experienced declines, with the FANG index sliding 1.8%. Icahn Enterprises saw a significant jump of 15.5% after the investment firm announced that Carl Icahn and banks have finalized amended loan agreements, which separate the activist investor's personal loans from the trading price of his firm. Chipmakers like Intel and Qualcomm recorded gains of 0.9% and 1.1%, respectively, following U.S. Treasury Secretary Janet Yellen's statement over the weekend. Yellen mentioned that meetings with senior Chinese officials were "direct" and "productive". Advancing issues outnumbered decliners with a ratio of 2.45-to-1 on the NYSE and 2.09-to-1 on the Nasdaq. The S&amp;P index recorded 20 new 52-week highs and four new lows, while the Nasdaq recorded 33 new highs and 24 new lows.

istockphoto-585093718-1024x1024-transformed (1).jpeg

Brace yourself for the impact of inflation data as the Dow and S&P 500 open higher. Gain insights into market movements and navigate with confidence.

Newest & Recent

Find the lastest update

Popular of the day

Most watched posts

Forex Glossary

A to Z Forex abbreviations

Daily Analysis

Industry Experts posts

Pinned Tags

#trade360

#finexo

#fxtrading.com

#sky alliance markets

#amega

#ospreyfx

#fxglory

#fibo group

#ig global

#bdswiss

#lcg

#fxgrow

#legacyfx

#superforex

#simplefx

#rakuten securities

#ifc markets

#triumphfx

#world forex

#amana capital

inflation data

3 articles published related to#inflation data

Dollar at 15-Month Low as Inflation Eases, Fuels Speculation...

Fed's Rate Hikes: US Dollar Drops to Three-Week Low

Dow and S&P 500 Open Higher Ahead of Inflation Data

Daily Analysis

Geo Politics