For the sixth session in a row, the general index of the US dollar recorded declines and lost more than 3%, trading below the 100 levels for the first time since April of last year, at the middle of today’s session, Thursday, July 13th.
Since the beginning of the week, the US dollar has been affected by rising market expectations regarding a less tightening of monetary policy and a lower interest rate hike in the remainder of the year, after economic data supported this hypothesis, the latest of which was the inflation figures issued yesterday, Thursday, which came below expectations at 3% in the June reading from 4% in June. May, recording the lowest reading since March 2021, while the annual basic index, excluding food and energy prices, came at 4.8%, the highest reading since January-October 2021.
Expectations of futures contracts by the FEDWatch tool from CME are now seeing an increase in interest rates by 25 basis points at the next bank meeting at the end of July, 95%, compared to less than 10% at the beginning of the week, while expectations for an additional interest rate hike decreased in the remaining meetings in September, November and December, and expectations rose to remain Interest at levels of 5.50% by the end of this year to 63%, which supported the declines of the US dollar and the gains of US and global stocks.
The markets are awaiting during the American session today, Thursday, the American Producer Price Index numbers, the side that complements the inflation figures, as the index is expected to rise to 0.2% in June, and the weekly unemployment claims figures are expected to be issued.
The Japanese yen is one of the biggest beneficiaries of the declines of the US dollar, as it increased by more than 500 points and traded at 138.50 levels, especially after expectations rose in the markets to delay the date for adjusting the yield curve control program from the Bank of Japan from July to October.
The euro is trading at 1.1160 levels against the US dollar, at its highest level since March 2022, while the pound sterling is trading at its highest level since April of last year, at 1.3045 levels.
01/11/2024
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