Por Peter Nurse
Investing.com – The US dollar loses positions at the start of trading in Europe on Wednesday, although it remains near two-decade highs as key inflation data is expected to be released that could weigh on the stance. the Federal Reserve.
At 09:10 AM ET, the , which tracks this coin against a basket of six other majors, is down 0.2% to 103.715, though it remains near highs of 104. .49 registered at the beginning of the week for the first time since December 2002.
The pair is up 0.2% to 1.0551, stabilizing after falling to more than five-year lows at 1.0469 late last month, while the pair is up 0.1%, up to 1.2339, up from 22-month lows at 1.2262 earlier in the week.
“Underperforming currencies, including the procyclical euro and sterling, seem to have earned the markets’ respect, although prolonged market volatility and shaky sentiment don’t appear to produce any winners other than the dollar.” , say analysts at ING (AS:) in a note.
Attention is focused on the US consumer price index reading for April, due later this day, with traders looking for any signs that inflation may be starting to cool off. The index is expected to post an annual rise of 8.1%, compared to an 8.5% rise in March.
The Federal Reserve raised its overnight benchmark interest rate by 50 basis points last week, its biggest hike in 22 years, and the policymakers who implemented this move have wanted to target more moves of this size—but not older—at future meetings.
“I would say (a 75 basis point rate hike) is an unlikely outcome given what I expect to happen to the economy in the next three to four months,” Atlanta Fed President Raphael Bostic said in a statement. an interview earlier this week.
That said, there are some market players who continue to believe that there will be a sharp rise in interest rates that will put the Federal Reserve at the forefront of tightening monetary policy.
The pair was down 0.1% to the 130.29 level, pulling back after hitting a more than two-decade high on Monday at 131.35.
The yen has been in freefall for much of this year as the Bank of Japan maintains its policy of low bond yields while US Treasury yields rise steadily.
However, Goldman Sachs has said in a note that the currency now has “considerable value”, stating that it is already 20-25% undervalued against the dollar and that it is the cheapest safe haven asset at a time when the risk of a global recession is on the rise.
Elsewhere, the pair is down 0.2% to 6.7222 on the back of stronger-than-expected Chinese inflation data, with April rising 0.4% MoM and 2.1% YoY , while the also rises 8% year-on-year.
The pair is up 0.5% to 0.6970, after hitting a 22-month low at 0.6911 earlier in the week, while the pair is down 0.2% to 1.2998.