USD stabilizes near 2-month high amid US debt ceiling negotiations; GBP falls after strong inflation data

The dollar stabilized on Wednesday, near its highest level in two months, in light of the prolonged negotiations related to raising the US debt ceiling, while the pound sterling fell after British inflation data came out stronger than expected.

Data from the British Office for National Statistics showed, on Wednesday, that annual consumer price inflation in the country slowed at its fastest pace in nearly 30 years, to 8.7 percent in April from 10.1 percent in March, but the most worrying numbers lie in the acceleration of core inflation – which excludes food prices. And volatile energy – unexpectedly to 6.8 percent, the highest rate since 1992, and last March it reached 6.2 percent.

On the other hand, the New Zealand dollar fell by 1.8 percent after the central bank there indicated to stop raising interest rates.

The dollar is still benefiting from statements that appeared at the beginning of the week about the need to continue the path of raising interest rates for the Fed. James Bullard, President of the Federal Reserve Bank in St. Louis, and Neil Kashkari, President of the Federal Reserve Bank in Minneapolis, indicated that the central bank may have to continue raising interest rates. If inflation remains high.

The US debt ceiling crisis remains unresolved, after a new round of talks between the White House and Republicans ended on Tuesday to raise the debt ceiling without any sign of progress.

And US Treasury Secretary Janet Yellen warned that the federal government may not have enough money to pay all its obligations by June 1, which increases the possibility of a debt default with harmful consequences.

currency movements

– The dollar index, which measures the currency’s performance against a basket of six major currencies, settled at 103.5, just below Tuesday’s level of 103.65, the highest level since March.

– In Europe, the euro rose by 0.17 percent, recording $1.0786, but the pound sterling declined slightly, recording $1.24105, after rising earlier by 0.44 percent to $1.247 after the inflation rate declined in Britain, but by a much lower rate than expectations.

– The New Zealand dollar fell to its lowest level in nearly three weeks, and fell in the latest trading by 1.7 percent, recording $0.6140.

– The Australian dollar fell 0.5 percent to $0.6578.

– The yen settled at 138.63 against the dollar, after touching 138.91 overnight, the lowest level in six months.