The US dollar continued to trade strong on Friday and most other currencies still traded weak despite soaring inflation on Thursday. The market prefers to rely on the stance of the Federal Reserve which sees that the inflation reading is a temporary one.
U.S. consumer prices were up 5% a year in May, one of the biggest jumps in nearly 13 years. The US dollar initially traded lower during the Asian market session as the market was still trying to digest the released data.
But market reactions began to differ as global markets opened up with major indices on Wall Street also soaring. Market analysts argue that market players continue to make follow -up purchases during an optimistic mood.
At the same time, U.S. consumer sentiment soared as inflation concerns eased and households were optimistic about economic growth and the employment sector in the future.
Data showed consumer sentiment rose to 86.4 compared to the May reading of 82.9. The US dollar continued its follow -up management of this report.
Analysts noted that investors felt confident that rising inflation was not enough to drive an early move by the Fed. The increase in the price of airline tickets and used cars supports the Fed’s view that the price increase is ‘temporary’.
The US dollar index strengthened by 0.50% to the exchange rate of 90.457 against major currencies. On the other hand, the Euro continues to depreciate as loose monetary policy will be maintained.
