Dollar Nerves Waiting for US CPI Report
The US dollar moved down in Friday's trading session (13 / Oct) this afternoon as US Treasury bond yields remained near lows, awaiting US inflation reports later in the night. The Dollar Index, which measures the strength of the US Dollar against major currencies, edged up 0.06 percent to 93,074.
"The movement of the Dollar index this week is more due to a correction to the big movement that has formed in September," said Marc Chandler, chief expert Forex at Brown Brothers Harriman, quoted by Businesstimes. "In essence, the Dollar index is corrective as the market is waiting for new signals."
USD / JPY is coming down today to 112.120, and is on course for a 0.3 percent drop this week. The greenback is often more in demand as a risk appetite by investors, compared with the Yen. However, the US Dollar response to the Nikkei's rise to a 21-year high this week appears to be limited.
EUR / USD rose 0.15 percent to 1.1848 then declined slightly as the news was written, heading for 1.1831 range. Over the course of the week, the pair has raised a 1 percent gain, especially after fears about Catalonia eased.
Expect Falling US Inflation Just Temporary
Traders are currently focusing on US CPI data to be published tonight. The FOMC minutes released yesterday highlighted the slow US inflation. Even some Fed officials suggested to be a little more patient in raising interest rates, to ensure that the current inflationary slowdown is indeed temporary.
The Fed has raised interest rates twice this year. The CME Group's FedWatch tool puts the percentage chance of a Fed rate hike in December by 88 percent.
"The US PPI (reported late last night) already shows signs of inflation, at least at the producer level, and we will see the CPI data," said Bill Northey, Head of Investment at U.S. Bank Wealth Management, cited by Reuters.
"There are a number of newly emerged signals, which indicate that there is pressure in the formation of inflation, but with regard to the points in the data, we must recognize that this would be a pretty noisy data set," added Northey referring to the impact of Harvey and Irma's storms. hit the US
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