The dollar hits its lowest level in more than a year as inflation slowed in June
The dollar plunged today, Wednesday, to its lowest level in more than a year, after data showed an acceleration in the pace of decline in US consumer prices in June, which indicates that the Federal Reserve may need to raise interest rates only once more this year. .
The dollar index, which measures the performance of the US currency against a basket of other major currencies, fell to its lowest level since April 2022, to 100.58 points.
The dollar also recorded its lowest level against the Swiss franc since early 2015 after the inflation report was released. It was last trading down 1.3% at 0.8676 francs, after hitting a one-day low of 0.8660 francs earlier, its weakest performance against the franc since 2015.
The core US consumer price index rose just 0.2% in June, compared to expectations for a 0.3% increase. On a yearly basis, the CPI rose 4.8%, lower than market expectations of a 5% increase. That was the smallest annual increase in more than two years.
The data released made the prospects of continued strong tightening from monetary policymakers in the world’s largest economy diminishing.
Periods of US interest cuts usually witness a clear weakness of the dollar against other currencies.
Against the yen, the dollar hit a six-week low of 138.17 yen. The euro rose, recording its highest level since March 2022, at $1.1125.
The pound sterling rose to a 15-month high of $1.30, supported by bets that the Bank of England (central) will have to continue tightening monetary policy to tame British inflation, which is increasing at the highest rate among major economies.
On the other hand, the New Zealand dollar rose 1.59% to $0.6297, and the Australian dollar rose 1.48% to $0.6787.
(Reuters, The New Arab)
2023-07-12 20:01:34
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