Dollar swings as market digests US inflation data, ECB

The dollar index was down slightly on Thursday in a choppy session in which it alternated between losses and gains as investors digested high US inflation data and comments from the European Central Bank.

After taking a wait-and-see stance all week, sucking market volatility and leaving major currencies mostly in ranges, Thursday’s news seemed to add little new direction to currency markets.

The European Central Bank raised its growth and inflation forecasts, but vowed to maintain ample stimulus, fearing that a pullback now could accelerate a worrying rise in borrowing costs and stifle the recovery . Read more

And across the pond, data showed that the number of Americans filing new jobless claims fell last week to the lowest level in nearly 15 months, while prices at Consumption rose further in May as the easing of the pandemic on the economy continued to boost domestic demand. Read more

The dollar index, which measures the greenback against a basket of major currencies, fluctuated tightly around the psychologically important level of 90 and fell 0.08% to 90.058. The euro rose 0.02% to $ 1.218 for the last time.

“You have this tug-of-war between the two currencies and it creates a back and forth. That’s why you see a small cap in terms of dollar weakness and euro strength,” said Minh Trang, senior negotiator. in foreign currency to Silicon Valley Bank. .

“The general trend has been a bit of dollar weakness, not just because of robust growth in the United States, there has been robust growth overall. Many economies have recovered,” he said. he declares. “When you are optimistic about overall global growth, it usually creates a risk on the mindset that will favor other currencies over the dollar.”

The Australian dollar was up 0.25% to $ 0.7749 while the New Zealand dollar was up 0.33% to $ 0.7199.

The yen was trading at 109.5850 to the dollar, also slightly lower from Wednesday.

Deutsche Bank’s currency volatility index (.DBCVIX) was at its lowest level since February 2020.

Investors were watching U.S. consumer prices closely for any sign that higher prices could last longer than expected, potentially questioning the Federal Reserve’s insistence that current inflationary pressures are transient and that Monetary stimulus is expected to remain in place for some time to come.

“People are digesting what the next step might be. Today’s data hasn’t given enough weight to engage one side or the other,” Trang said.

Traders sent longer-term US Treasury yields higher after Thursday’s inflation data steepened a closely watched part of the yield curve.

In crypto markets, bitcoin held onto gains from its biggest rally since February on Wednesday, when it jumped nearly 12%.

It last traded slightly higher to $ 37,464, after rebounding from a three-week low at $ 31,025 reached on Tuesday when signs of cautious institutional investors and regulatory attention led to the sale.

The most well-known cryptocurrency has struggled since it hit a record high of $ 64,895.22 in mid-April.

=================================================== ======

Currency Bid Price at 10:03 AM (1403 GMT)

Our standards: Thomson Reuters Trust Principles.

About Earl V.

Check Also

Wall Street’s new fear is that the economy has already peaked by Bloomberg

© Reuters. Wall Street’s new fear is that the economy has already peaked (Bloomberg) – …