
Dollar Extends Gains Ahead of U.S. CPI
FxPremiere.com — Fx Signals – The dollar strengthened in early European trading Wednesday, extending recent gains ahead of U.S. inflation data which could influence Federal Reserve’s tapering thinking.
At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded around 0.1% higher at 93.097, hitting its highest level since the start of April. Dollar Extends Gains Ahead of U.S. CPI
USD/JPY rose 0.1% to 110.67, the highest since mid July, EUR/USD was largely flat at 1.1717, near a four-month low, GBP/USD was 0.1% lower at 1.3830, near a two-week low, while the risk-sensitive AUD/USD fell 0.1% at 0.7340.
Dollar extends four-month high
The dollar has been on the rise of late, as improving U.S. labor data and a more hawkish tone from Federal Reserve policymakers have led markets to expect the central bank to begin tapering its asset purchases later this year.
Friday’s official U.S. jobs report impressed, with nonfarm payrolls rising by 943,000 in July and numbers for May and June also being revised higher.
Now the attention turns to the second leg of the Fed’s dual mandate, with the consumer price index for July due out from the Bureau of Labor Statistics at 8:30 AM ET (1230 GMT).
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Analysts are looking for a gain in the headline figure of 5.3% over last year, marginally lower than June’s 5.4%, which was the biggest monthly gain since August 2008.
Sterling gains dollar on back foot
“Markets would hardly be surprised over a sizzling inflation report in July,” said analysts at Nordea, in a note. “We expect core inflation around 4.8%, likely unhinging Powell and expediting the talk about tapering as early as in September.”
Dollar Extends Gains Ahead of U.S. CPI
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Dollar Extends Gains Ahead of U.S. CPI
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