By Peter Nurse
Investing.com – The dollar loses positions at the beginning of the trading day in Europe this Tuesday, pending the release this week of key data on US inflation that will determine the interest rate forecasts of the Federal Reserve.
At 8:55 a.m. (CET), the, which follows the evolution of this currency against a basket of six other major currencies, fell 0.1% to 93.938, falling further from the highs recorded on Friday at 94.645 , its highest level in more than a year.
The pair gains 0.1% to the level of 1.1597, the falls 0.4% to 112.82, the pair points a rise of 0.1% to 1.3568, and the, very sensitive to risk , remains practically flat at 0.7420.
In its last monetary policy meeting, the Federal Reserve has been very insistent that it will be “patient” when deciding when to raise rates, which has driven the dollar down, even after the robust employment report on Friday.
This is because Federal Reserve fund futures have pushed the likely rate hike date from around July next year to September or October.
However, this data predates the release of the latest US inflation data, beginning with ex-works prices on Tuesday, which is expected to show that inflation remains a major factor in the central bank’s musings.
That of the United States is expected to have risen 0.6% in October, that is, 8.7% for the year as a whole, at 2:30 p.m. (CET).
“We continue to see inflation likely to continue to rise at the end of the year,” Nordea (ST 🙂 analysts say in a note. “Apartment List rental data has continued to skyrocket in October and is now at 15.8% year-on-year, indicating that there are many upside risks to the CPI in the next six months. Second-hand car prices hand have started to rise again, and we could see a rebound in hotel prices, in addition to airline rates, if the cases of the Delta variant of Covid-19 continue to decline at Christmas. “
In addition to these inflation data, several central bankers will appear this Tuesday, such as the president of the European Central Bank, Christine Lagarde, and the president of the Fed, Jerome Powell.
On the other hand, it rose 0.5% to the 9.7250 level after Turkey’s central bank cut the amount that banks can hold as part of their lira reserve requirements, thus increasing the amount of local currency that lenders must deposit with the central bank.
The central bank has also increased the mandatory reserve ratios for foreign currency deposits by 200 basis points to offset any impact on its reserves.
The lira has come under great pressure as President Recep Tayyip Erdogan battles established notions of monetary policy by trying to cut interest rates to fight rising inflation.