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July 13, 2021

USD Recent Movements Ahead of US Inflation Data

 The greenback dollar climbed higher in the European session as markets await the release of US inflation data tonight which is expected to continue to show improvement.


The possibility for a US stimulus withdrawal following hawkish projections from the Federal Reserve (Fed) last month, has driven the strengthening of the US dollar over the past few weeks.


Readings of US inflation data, which will be released in the New York session, will be watched by Fed policymakers to make further assessments on when tightening will begin.


At the time of writing, the dollar index is trading 0.1% higher against a basket of major currencies at 92.33.



Meanwhile, concerns over the increase in Covid-19 cases worldwide are growing, especially when infection cases in the United States are also showing an increase.


This has caused most major currencies to continue to trade under pressure, especially Asian currencies.


The Aussie dollar moved around a six -month low against the US dollar, amid expectations that sanctions measures in Sydney will be extended following more cases of infection being recorded.


Meanwhile, the euro also traded lower after European Central Bank (ECB) President Christine Lagarde said that their new strategy of raising inflation targets was an indication that there was unlikely to be premature monetary tightening as seen in the past.