© Reuters Forex Europe: US CPI hits hard, dollar slides slightly
Investing.com – In Thursday’s European morning trading (10th), the dollar was slightly lower, reducing some of its earlier gains as investors awaited the latest inflation data in the US.
At 4:54 pm Beijing time (3:54 am ET), the dollar, which measures the dollar’s performance against the six major trade-weighted currencies, fell 0.04% to 110.412; fell 0.12% to 110.42. The benchmark US Treasury yield was 4.094%.
The focus for the day was on the U.S. October CPI, which should help investors consider whether to raise interest rates by another 75 basis points at the December meeting or reduce the intensity of interest rate hikes to just 50 basis points. basis points.
Analysts now expect it to drop to 8%, the lowest level since February, but is expected to rise to 0.6% from 0.4% in September.
The main forecast, which excludes energy and food prices, rose to 6.6% from 6.5%, down slightly from 0.6% the previous month to 0.5%.
“If core inflation is in line with the consensus at 0.5% m / m, market expectations for federal funds to hit 5% next year remain unchanged, supporting the dollar,” analysts said. by ING.
Meanwhile, cryptocurrency market turmoil also supported the US dollar’s move yesterday. Previously, cryptocurrency exchange Binance announced that it would abandon the acquisition of rival FTX, prompting investors to sell digital currencies and flock to the US dollar for safety.
Furthermore, the outcome of the US midterm elections is still not entirely clear, but Republicans are expected to control the House of Representatives by a narrow margin and the US executive and legislative bodies could be blocked for the next two. years.
“The fact that Republicans control the House of Representatives while Democrats control the Senate could be slightly positive for the dollar, as a Biden administration can only focus on executive orders,” ING said.
It fell 0.21% to 0.9990, rose 0.32% to 1.1392, and highly risk sensitive sentiment fell 0.36% to 0.6407.
It fell 0.11 percent to 146.27. The yen recovered from its weakest level recently hit since 1992. Bank of Japan Governor Kuroda Haruhiko said today that the Japanese government has adequately addressed speculative foreign exchange movements.
But he also said he was not yet at the stage where an exit from the easing could be discussed. He said that rising interest rates will now hurt the economy, which is still in the process of recovering from the impact of the epidemic, so it is not advisable to raise interest rates now.
It rose 0.06% to 7.2460 as the pandemic continued to weigh on the economic outlook and the exchange rate.
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