The U.S. dollar exhibited an upward trend on Thursday, waiting for the U.S. inflation data to be released. It showed a recovery from its previous low, with the Dollar Index rising by 0.2%. Currency experts’ anticipation of soon-to-be-released US inflation figures has galvanized the dollar into action.
Last week, the U.S. dollar depreciated significantly, causing concerns among Federal Reserve officials. The central bank may maintain the current interest rates due to steady inflation and a strong economy. The devaluation of the dollar also sparked a surge in commodity prices, further influencing the financial markets. Despite this, Wall Street showed resilience as stocks continued to rally.
Boston Fed Bank President Susan M. Collins emphasized the need for the U.S. economy to cool down to keep inflation within an acceptable range. He advocated for potential measures such as increased interest rates or stricter regulation to help steer the economy in the right direction.
Dollar strengthens awaiting US inflation data
These sentiments sparked a robust debate regarding the future trajectory of the American economy.
In the United Kingdom, the pound decreased by 0.2% ahead of a Bank of England monetary policy session. The U.K. central bank is predicted to avoid any interest rate changes. However, traders are keeping a close watch for potential signs of a rate cut in June.
The Japanese Yen weakened due to disagreements over future interest rate increases. The Bank of Japan announced that its members advocated for a gradual rise in interest rates, putting the Yen under pressure. Encouraged by other global central banks’ decisions, the Japanese Yen lost its strength against other major currencies.
The Yuan increased by 0.1% in China, maintaining its prior gains. The rise in internal demand within China in April triggered this upward trend—the observed growth in the Chinese Yuan results from increased domestic demand.
