© Reuters.
Investing.com – The US dollar fell in early European trading hours on Tuesday, trading near its lowest level in more than one year as traders’ interest in the immediate end to the Federal Reserve’s tightening cycle grows.
At 02:55 EST (06:55 GMT), the dollar, which measures the greenback against a basket of six other currencies, was trading down 0.1% at 99.415, above the 99.362 level seen earlier on Tuesday, It is the lowest level since April 2022.
It is widely expected to raise interest rates again when it meets next week, but markets are focused on the end of the FOMC’s tightening cycle after it posted its smallest annual increase in more than two years last week.
This resulted in the dollar posting its worst weekly performance in eight months, falling more than 2% against its major rivals.
US retail sales, industrial production due
Markets are now awaiting the release of US data and data, due later in the day, to get more clues about the health of the world’s largest economy, and the likely path of interest rates.
The June retail sales reading is expected to improve from the previous month, while industrial production growth is also expected to accelerate in June, indicating some resilience in the US economy.
However, it is debatable whether these numbers will change market sentiment given last week’s tepid consumer and.
ING analysts said in a note: “Last week’s US inflation shock changed the landscape in the FX market, but after a few days without releasing major data that will tell us whether this impulse can keep the dollar on edge as the FOMC risk event approaches. open”. .
Still more tightening on the European Central Bank and Bank of England
It rose 0.2% to 1.1252, just below a fresh 17-month high, while it rose 0.1% to 1.3089, not far from last week’s high of 1.3144, which is also the highest level since April 2022.
It is widely expected that both The and the Group will raise their benchmark interest rates again when they next meet, and they are unlikely to stop the tightening cycle there.
The UK will release inflation data for June on Wednesday and while it is expected to ease to 8.2% y/y from 8.7% in May, this is still more than four times higher than the BoE’s inflation target.
Similarly, inflation levels in Germany, the eurozone’s largest economy, rose in June to 6.8% year-on-year, when aligned with other EU countries.
Elsewhere, it fell 0.3% to 138.37 before the Bank of Japan next week, and rose 0.1% to 0.6823, with the Australian dollar recovering some of the previous session’s sharp losses.
It traded flat at 7.1716, holding back after heavy losses on Monday as traders look to the People’s Bank of China for more stimulus measures in the coming months.
