U.S. Dollar Lower As Inflation Data In Focus
June 09 2021 - 12:20AM
RTTF2
The U.S. dollar fell against its major counterparts in the Asian
session on Wednesday, as investors focus on U.S. inflation data for
clues about the tapering of the asset purchase program by the
Federal Reserve.
The U.S. CPI is forecast to rise 0.4 percent on month in May,
taking annual rate to 4.7 percent.
Core CPI is seen at 0.4 percent on a monthly basis and 3.4
percent year-on-year.
The data will help gauge the timing of Fed tapering and the
prospect of interest rate hikes.
U.S. bond yields fell, with the benchmark 10-year treasury yield
falling to 1.52 percent.
Investors shrugged off data showing a surge in China factory
prices in May.
The European Central Bank's monetary policy decision is due on
Thursday, with investors expecting it to keep key rates and
stimulus measures unchanged.
The ECB is likely to avoid any mention of tapering its purchases
under PEPP as policy makers want to see a sustained recovery from
the pandemic.
The greenback pulled back from its early highs of 1.2171 against
the euro and 109.51 against the yen, falling to 1.2187 and 109.33,
respectively. The greenback is seen locating support around 1.24
against the euro and 106.00 against the yen.
After rising to 1.4142 against the pound and 0.8970 against the
franc earlier in the session, the greenback edged down to 1.4183
and 0.8958, respectively. If the greenback slides further, 1.45 and
0.88 are likely seen as its next support levels against the pound
and the franc, respectively.
The greenback weakened to 1.2095 against the loonie, 0.7209
against the kiwi and 0.7753 against the aussie, down from its prior
highs of 1.2117, 0.7189 and 0.7733, respectively. The next possible
support for the greenback is seen around 1.18 against the loonie,
0.74 against the kiwi and 0.80 against the aussie.
Looking ahead, at 10:00 am ET, the Bank of Canada announces
decision on interest rates. Economists forecast the benchmark rate
to hold at 0.25 percent.
U.S. wholesale inventories for April are due in the New York
session.
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