Dollar Gains as Markets Weigh Fed’s Comments
The US dollar was up sharply against its major trading partners early Friday ahead of a quiet day to end the busy week while markets weigh Federal Reserve talk ahead of the US gross domestic product data release.
The only data scheduled for release on Friday are monthly state employment and unemployment reports, allowing markets and analysts to focus on next week’s GDP and personal income reports and the Federal Reserve’s annual Jackson Hole conference.
Markets focused on more-recent comments from Fed officials this week who suggest that the FOMC will not let up in its inflation fight despite some signs of improvement in the recent data and that a recession is possible but also may be needed to bring down inflation.
A quick summary of foreign exchange activity heading into Friday shows that USDEUR fell to 1.0059 from 1.0087 at the Thursday US close and 1.0171 at the same time Thursday morning. READ: Dollar Mixed as Markets Seek Assurance of Fed’s Cautious Move
German producer inflation surged in July, setting new records for the month-over-month and year-over-year rates, a day after overall EU consumer inflation accelerated. The European Central Bank next meets to discuss monetary policy on Sept. 9.
GBPUSD fell to 1.1834 from 1.1932 at the Thursday US close and 1.2057 at the same point Thursday morning.
UK retail sales rose unexpectedly in July due to online deals, data released overnight showed, but a separate survey showed that consumer confidence hit a record low in August. The Bank of England is expected to raise interest rates by another 50 basis points at its Sept. 15 meeting.
USDJPY surged to 136.9339 from 135.8864 at the Thursday US close and 135.1532 at the same point Thursday morning. Japanese core CPI accelerated at its strongest pace in seven years in July, adding resistance to the Bank of Japan’s accommodative monetary policy plans.
The Bank of Japan is expected to maintain its policy stance at its next meeting on Sept. 21-22, but there is mounting pressure to alter its course. USDCAD rose to 1.299 from 1.2946 at the Thursday US close and 1.2886 at the same point Thursday morning.
The Bank of Canada’s monetary policy committee meets next on Sept. 7 and is expected to raise interest rates further to fight stubborn price growth. #Dollar Gains as Markets Weigh Fed’s Comments
