Dollar prepares for weekly decline
Dollar prepares for weekly decline
Although the dollar rose against many of its global counterparts on Friday, it is preparing for a weekly decline amid slowing US inflation.
According to TradingView, the euro has gained 0.84% against the dollar over the past five days. At the time of writing, the EUR/USD is trading at 1.0866.
A report from the US Department of Labor showed that the annualized rate of US inflation slowed in April, increasing confidence that the Federal Reserve (Fed) will shift to a policy of interest rate cuts at its September and December meetings. These expectations triggered a rally in stocks and bonds and put pressure on the dollar, Reuters reported.
In addition, other US economic indicators, including retail sales and industrial production, fell short of Wall Street expectations.
Westpac's Imre Speiser stressed that the selling of the dollar will continue as many economic data are cooling off.
However, the euro was supported by the latest German data, which showed that the German economy grew more than expected in the last quarter and that investor sentiment is at a two-year high.
The GBP/USD fell 0.06% to 1.2661 over the past 24 hours, but has gained 1.15% over the past five days.
AUD/USD and NZD/USD are trading at 0.6670 and 0.6117, down 0.12% and 0.08% over the past 24 hours, and up 1.05% and 1.63% over the past week.
The Japanese yen came under renewed pressure as the Bank of Japan maintained its bond purchases from the previous operation, abandoning the unexpected tapering of debt purchases earlier in the week.
The USD/JPY jumped 0.29% to 155.82 today and is set to end the week up 0.12%.
At the same time, the Chinese yuan weakened slightly by 0.05% to 7.221 and may end the week down 0.12%.
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