Investing.com – The U.S. dollar edged higher on Friday, on track to end a five-week losing streak ahead of the release of key inflation data.
At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was trading 0.1% higher at 101.314, after rising to its highest level since August 22 on 101.58 on Thursday. .
Dollar on track for weekly gains
The dollar is on track to rise 0.6% this week, which would be its best week since early April, helped by continued signs of economic resilience in the US after gross domestic product data showed the economy in grew more strongly in the second half of the year than initially expected. quarter.
However, the US currency is still expected to fall around 2.5% in August, which would be its worst month since November, as traders factored in the Federal Reserve entering a rate-cutting cycle.
Speaking at the Fed’s annual earnings call last week, Fed Chairman Jerome Powell acknowledged recent progress on inflation and said “the time has come for policy adjustment.”
This was seen by markets as a guarantee of a rate cut at next month’s policy meeting, which would be the first cut in more than four years.
However, debate remains over the size of the cuts and the pace of future cuts.
The , the Federal Reserve’s preferred inflation measure, is due later in the session and could provide more information for that debate.
Inflation in the eurozone is cooling
In Europe, trading traded 0.1% higher at 1.1092 after eurozone consumer inflation confirmed signs of slowing inflation in August.
rose 2.2% year-over-year in August, down from 2.6% the month before, and a monthly gain of 0.2%.
They started cutting rates in June, and a sharp drop in inflation is likely to prompt policymakers to cut again next month.
rose 0.2% to 1.3188, close to the highest level since March 2022, boosted by expectations that the Bank of England will keep interest rates high for longer than in the United States and the eurozone.
The interest rate cuts by 25 basis points on August 1 to 5% and the money markets are pricing in another 40 basis points of cuts by the end of the year.
Yen close to recent highs
In Asia, the rate held steady at 145.01, close to the low seen in early August at the height of pro-yen trading.
Data from Tokyo shows inflation grew slightly stronger than expected in August, with core inflation moving back towards the Bank of Japan’s annual target of 2%, while private spending improves.
This reading promoted the idea that rising inflation will give the BOJ more room to raise rates further this year. The CPI reading also helped markets look past disappointing industrial production and retail sales.
traded 0.1% lower at 7.0907, falling to the lowest level since late December.
The yuan, along with broader Chinese markets, was buoyed by news that Beijing planned to refinance $5.4 trillion in mortgages – which would be a shot in the arm for the real estate market, which is at the heart of the Chinese economic downturn.
