Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. 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.

NEWS

Aussie dollar jumps on inflation spike, while yen stays under pressure

Aussie dollar jumps on inflation spike, while yen stays under pressure

By Harry Robertson and Tom Westbrook

LONDON/SINGAPORE (Reuters) -The Australian dollar rallied after a surprise jump in inflation on Wednesday raised the prospect of another rate hike, while the U.S. dollar kept downward pressure on the Japanese yen.

Moves elsewhere in the market were relatively subdued as investors waited for the release of the Federal Reserve’s preferred gauge of inflation on Friday.

Australian inflation accelerated to a six-month high of 4% in May, which had traders scrambling to price in a 70% chance of a further rate hike by November and sent the Aussie dollar up 0.46% at $0.6679. [AUD/]

“Today’s inflation data from Australia will be very concerning for the Reserve Bank of Australia and could well tilt a decision in favour of a hike when it next meets on 6 August,” said Derek Halpenny, currency strategist at Japanese bank MUFG.

A similar surprise in Canadian inflation had sent the Canadian dollar briefly spiking to a three-week high as investors dialled back expectations of further cuts. [CAD/]

Elsewhere the euro slipped 0.16% to $1.0698 after a European Central Bank policymaker talked up the chances of further rate cuts this year, a notably different stance from the Fed’s Michelle Bowman.

ECB governing council member Olli Rehn told Bloomberg that two more cuts this year seemed “reasonable”. That contrasted with Fed Governor Bowman, who said she does not expect any U.S. rate cuts this year.

Francesco Pesole, FX strategist at ING, said political risks stemming from French parliamentary elections were at the front of investors’ minds.

“Euro-U.S. dollar price action into the weekend will be determined by French election positioning and Friday’s US PCE (inflation data),” he said.

The dollar index, which tracks the currency against six peers, rose 0.1% to 105.78, around its highest level in two months.

A pick-up in the dollar hurt the Japanese yen, with the U.S. currency rising 0.14% to 159.895 yen. The move kept traders on alert for signs of intervention, being only a whisker from where Japanese authorities stepped in to buy yen in April.

Sterling dipped 0.14% to $1.2669, with the lack of movement reflecting thin trade ahead of the U.S. data release. Citi said this week that its etraders found interbank FX volumes some 40% lower than thirty-day averages.

Analysts expect Friday’s U.S. data will show personal consumption expenditure index inflation slowed to 2.6% in May, the lowest in more than three years, down from 2.7% in April.

The yuan was also getting squeezed by the dollar’s stubborn strength, with China seemingly having signalled some tolerance for a cheaper currency by gradually weakening the midpoint of the yuan’s daily trading range on the dollar.

The yuan, which has hugged the low side of its band for months, slumped to a seven-month trough on Wednesday of 7.2670 per dollar. [CNY/]

(Reporting by Harry Robertson in London and Tom Westbrook in Singapore; Editing by Stephen Coates, Edwina Gibbs and Anil D’Silva)

 

Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts