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Weekly roundup: US dollar rally fades as inflation misses

currency-newsWeekly roundup: US dollar rally fades as inflation misses
The US dollar’s recent surge higher appeared to come to an end last week as the latest US inflation figures printed below expectations.

The US dollar initially strengthened last week as concerns Donald Trump would pull out of the Iranian nuclear prompted investors to flock to the relative safety of the dollar, fearing a rise in geopolitical tensions.

The USD exchange rate also ticked up on Tuesday as US job openings were shown to have reached a record high 6.5m in March and allowing the dollar to strike a new four-month high in the middle of the week.

However USD sentiment was dealt a heavy blow in the second half of the week following the publication of the latest US CPI figures, which saw core inflation slow from 0.2% to 0.1% in April.

This weakness was then accentuated by comments from St. Louis Reserve Bank President, James Bullard, in which he suggested US interest rates were nearing ‘neutral’ level and that no further rates hikes were necessary.

Looking ahead the US dollar may struggle at the start of this week’s session as the latest retail report is forecast to show domestic sales growth slowed in April.

These losses could be further accelerated later in the week if figures reveal US industrial production remained subdued last month.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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