Dollar Rose to a Two-Week High Versus a Basket of Currencies

238
United states inflation, dollar

The U.S. dollar jumped to a two-week high versus a basket of major currencies on Monday as market expectation builds that the Federal Reserve could taper its stimulus sooner rather than later despite a surge in Covid-19 cases.

The dollar index gained 0.3% to 92.880 in early European trading hours, its highest point since August 27. The dollar index was last up 0.2%.

The euro was not able to strengthen its position against the dollar. The single currency fell 0.3% to $1.17750, its lowest level in a little over two weeks. Several days ago, the European Central Bank (ECB) said it would start to trim its own emergency bond purchases. The ECB’s decision had a negative impact on the euro.

The yen dropped around 0.2% and was last at 110.090. 

 

Dollar and various factors 

Investors and analysts are paying close attention to any reading on inflation these days. Undoubtedly, the consumer price index will be the big one to watch in the coming week. The consumer price index comes just a week before the Federal Reserve’s important September meeting. The central bank is expected to discuss more details about its plan to taper down its bond-buying program or quantitative easing at that meeting. 

A hotter inflation reading could speed up the Fed’s plans to slow $120 billion a month in bond purchases according to analysts. Economists expect the consumer price index to rise at a 0.4% pace month over month. This report is interesting as it comes after August’s producer price index showed a jump of 8.3% year over year. 

The Philadelphia Fed President Patrick Harker explained his position regarding the Fed’s plans. He became the latest official to say he wants the Fed to start tapering in 2021. 

In two days, the Federal Reserve will issue its monthly tally of U.S. industrial production. In July, overall industrial production, which includes manufacturing, utilities and mining, posted a 0.9% increase, the biggest gain since March. When it comes to an annual basis, industrial production in July of 2021 was 6.6% higher compared to its July 2020 level. 

The Commerce Department is also expected to release its report about U.S. retail sales in August. One month earlier, retail sales dropped 1.1%, when spending declined at stores that sell clothing, furniture and sporting goods. 

  • Support
  • Platform
  • Spreads
  • Trading Instument

For more news updates, visit our homepage now and see our latest news article. Want to learn more about trading? Visit our education page now and learn for FREE!

Tags:

Leave a Reply

Sending