Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
2024 05 17T011301Z 1 LYNXMPEK4G00T RTROPTP 4 GLOBAL FOREX - Business Express

Dollar mostly flat as market mulls inflation outlook

Dollar mostly flat as market mulls inflation outlook

By Herbert Lash and Iain Withers

NEW YORK/LONDON (Reuters) – The dollar traded little changed against major currencies on Friday as market speculation continues to swirl about the timing of Federal Reserve rate cuts amid signs of cooling yet persistent inflation and a softening U.S. economy.

While consumer prices rose less than expected in April, leading to a risk-on flavor in equity markets, various Fed officials have sounded a word of caution about when rates may fall, limiting the dollar’s decline this week.

The dollar index, which tracks the U.S. currency against six peers, fell 0.03% at 104.46 after earlier trading about 0.3% higher.

Futures markets are pricing in almost 46 basis points, or about two 25 bps of Fed rate cuts by December, but the likelihood of a cut as early as September has slipped.

“It literally might be a handful of CPI reports and a handful of jobs reports before the Fed moves,” said Matt Weller, global head of research at in Grand Rapids, Michigan.

“The market over-reacted perhaps on Wednesday and now we’re seeing a little bit of that over-reaction come off and that inflation could re-accelerate.”

U.S. inflation accelerated in the first quarter amid strong domestic demand after moderating for much of last year. Last month’s slowdown was a relief after data on Tuesday showed a jump in producer prices in April.

Policymakers said on Thursday that still-high inflation warrants keeping rates at current levels and that reaching the Fed’s 2% inflation target will take longer than previously thought.

A surprisingly large 0.9% jump in import prices on Thursday kept inflation worries high as rising import costs will only add to inflationary pressures.

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.

Even though markets are pricing European rate cuts beginning in June, recent data has shown some upside surprises. Germany’s economy grew more than expected last quarter and investor morale is at a two-year high.

Euro zone consumer inflation data on Friday came in at 2.4% year-on-year in April, in line with a Reuters poll.

The euro rose 0.03% against the dollar to $1.0872.

Euro zone policymakers have increased confidence that inflation will ease back to target next year due to easing price pressures, ECB Vice-President Luis de Guindos said on Friday.

Largely disappointing Chinese data on Friday helped keep market risk sentiment in check. Factory output topped forecasts but retail sales slowed and home prices fell at their fastest pace in more than nine years.

Sterling rose 0.21% to $1.2692, while the dollar gained 0.05% on the Japanese yen at 155.455.

In cryptocurrency markets, bitcoin was up 1.7% at $66,6399.


(Reporting by Herbert Lash, additional reporting by Iain Withers and Tom Westbrook in Singapore; Editing by Timothy Heritage and Emelia Sithole-Matarise)

Recent Post: