U.S Dollar Recovers After Softer Reading on Inflation
The United States (U.S) dollar recovered later Tuesday after falling earlier following a softer-than-expected reading on consumer inflation. The greenback has plunged against major currencies in recent times due to pressure, according to the dollar index (DXY) tracked.
DXY recovered to 92.54 after initially falling to a six-session low of 92.32 after the August consumers price index (CPI) has marketed more convinced that the Federal Open Market Committee will postpone its expected asset purchase taper announcement from next week’s meeting until November.
August industrial production data will be released on Wednesday after the Empire State index’s first look at September manufacturing conditions. Retail sales will be released on Thursday.
A quick summary of foreign exchange action on Tuesday shows that EUR-USD rallied to 1.1846 from near 1.1805 following the CPI data but slipped back later in the day. Until the Fed’s taper intentions are clearer, the upside to the dollar will likely be restrained.
GBP-USD rallied to a one-month high of 1.3913, due to the weaker dollar and a boost in the pound reflecting stronger UK labour data.
The UK government will scale back its pandemic wage assistance at the end of September and the Bank of England will likely take its next cue from how the UK economy reacts to that shock.
USD-JPY dropped from an intraday high of 110.16 after the CPI data to 109.60 later as markets see slower inflation growth putting off the start of the Fed’s tightening track.
USD-CAD rose to 1.2680 later in the day as lower oil prices pulled down the Canadian dollar, offsetting the impact of the weaker US CPI reading and stronger Canada manufacturing shipments that drove the pair down to 1.2602 at the low point of the day.
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U.S Dollar Recovers After Softer Reading on Inflation
