U.S. Dollar Appreciates Ahead Of U.S. Inflation Data
June 10 2021 - 2:45AM
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The U.S. dollar firmed against its most major rivals in the
European session on Thursday, as market participants looked forward
to U.S. inflation data for clues on the Federal Reserve's monetary
policy outlook.
The U.S. CPI is forecast to rise 0.4 percent on month in May,
taking annual rate to 4.7 percent.
Core CPI is seen at 0.4 percent on a monthly basis and 3.4
percent year-on-year.
Strong reading could stoke worries over sooner-than-expected
tapering of stimulus measures by the Fed.
In another development, the Biden administration revoked
Trump-era bans on TikTok and WeChat and ordered a review of
software applications tied to China.
Ahead of this weekend's G7 summit, the U.S. said it will buy 500
million doses of the Pfizer COVID-19 vaccine to share through the
global COVAX alliance for donation to 92 low-income countries and
the African Union.
The draft G7 document will have leaders committing to 1 billion
more coronavirus vaccines to cover 80 percent of the world's
population, Bloomberg said.
The currency has been trading higher against its key
counterparts in the Asian session, except the pound.
The greenback touched a 3-day high of 1.2153 against the euro
and near a 4-week high of 1.4073 against the pound, up from
Wednesday's closing values of 1.2178 and 1.4113, respectively. The
next likely resistance for the greenback is seen around 1.20
against the euro and 1.37 against the pound.
The greenback approached a session's high of 0.8972 against the
franc, compared to yesterday's close of 0.8955. On the upside, 0.92
is likely seen as its next resistance level.
In contrast, the greenback reversed from 6-day highs of 0.7165
against the kiwi, 0.7722 against the aussie and 1.2125 against the
loonie and retreated to 0.7188, 0.7742 and 1.2105, respectively. If
the greenback falls further, 0.73, 0.80 and 1.20 are likely seen as
its next support levels against the kiwi, the aussie and the
loonie, respectively.
The greenback eased off to 109.46 against the yen, from a 6-day
high of 109.68 seen in the previous session. The greenback is seen
finding support around the 108 area.
Data from the Bank of Japan showed that Japan producer prices
climbed 0.7 percent on month in May.
That exceeded expectations for an increase of 0.5 percent and
was down from 0.9 percent in April.
Looking ahead, the European Central Bank will announce interest
rate decision at 7:45 am ET. The ECB is expected to hold its main
refi rate at a record low zero percent and the deposit rate at
-0.50 percent.
U.S. CPI for May, weekly jobless claims for the week ended June
5 and monthly budget statement for May are scheduled for release in
the New York session.
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