U.S. Dollar is on Course for a Weekly Gain

56
Federal Reserve and lawmakers

The U.S. dollar was on track for a weekly gain on July 16, supported by investors’ drift toward safety due to the rising number of Covid-19 infections.

The dollar index which tracks the U.S. currency against a basket of foreign currencies is on course for a 0.6% gain for the week. That would be its most significant weekly rise in several weeks. The index added 0.1% on the day to 92.700.

Solid U.S. data and a shift in interest rate expectations after the Federal Reserve flagged in June sooner-than-expected hikes in 2023, threatened the stability of the dollar over the past month and made investors nervous about shorting it. 

The gains came despite Federal Reserve Chair Jerome Powell reiterating that rising inflation was likely to be transitory. Jerome Powell said he remains confident the recent rise in prices will ease on its own. But overall he said the prices that are rising, such as for used cars, “have a story” related to the Covid-19 reopening and are more idiosyncratic than broad. He also told lawmakers that the Federal Reserve would continue to support the economy.

Jerome Powell’s comments coincided with rising concerns that increasing inflation pressures are creating a serious issue for many people. Inflation represents a potential threat to recovery from the pandemic recession. Two days ago, the country’s government reported that wholesale prices rose 7.3% last month from a year earlier. It was the fastest such a 12-month rise on records dating to 2010.

Traders will be watching out for U.S. retail sale figures for last month. They will be looking for any reading on inflation as well as the strength of the country’s economy. 

Dollar, euro, yen, and the New Zealand dollar 

On Friday, the New Zealand dollar strengthened its position during the Asian trading session. The data showed that consumer prices in New Zealand rose faster than anticipated, prompting some in the market to bet on a bike hike as soon as August. The data regarding consumer prices helped to boost the country’s currency. The kiwi gained as much as 1% versus the greenback and was last up 0.4% at $0.70080.

The U.S. currency gained around a third of a percent on the yen, last at 110.08 yen. The euro dropped 0.1% against the U.S. currency to $1.18015. 

Cryptocurrencies found support on Friday, nonetheless, were close to the bottom of the recent ranges with bitcoin at $31,332. 

  • 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