An employee counts US dollars at a change office in Rio de Janeiro, Brazil.
Vanderlai Almeida | AFP | Getty Images
The dollar strengthened on Monday after a slightly weaker-than-expected U.S. inflation weakened investor confidence that the Federal Reserve could tighten monetary policy if consumer price pressures continued. intensify
The dollar index against the other six major currencies was flat at 91.793, recovering from Friday’s low of 91.524 hit by inflation readings.
The euro was little changed at $1.19385, struggling to recover at $1.20, while the dollar totaled 110.80 yen, not far from Wednesday’s 15-month high of 110.105.
The personal consumption expenditures (PCE) price index, excluding volatile food and energy components, rose 0.5% after rising 0.7% in April.
During the 12 months until May The so-called core PCE price index, the Fed’s favorite inflation gauge, surged 3.4 percent, its highest increase since April 1992.
Although inflation is expected to slow at the end of the year. But signs of a tight labor market have led many investors to worry about price pressure from wages.
Among the economic indicators due this week Friday’s payroll data is the main focus. Economists expect non-farm payrolls to increase by 675,000.
Yukio Ishizuki, senior currency strategist at Daiwa Securities, said: “Depending on the results of the salary data, Markets may begin to set prices in the likelihood of more interest rate hikes next year.”
Dec. 2022 Fed fund rate futures almost fully priced in 0.25% interest rate hike by the end of next year.
Overall mood about continued economic recovery remains strong. Republican Senate negotiators on the infrastructure deal are optimistic about the $1.2 trillion bipartisan bill after President Joe Biden withdrew his threat to veto the measure. unless separate Democrats’ spending plans also pass Congress.
Cryptocurrencies bounced back from weekend lows but ended the week lower
Bitcoin is trading at $32,820, down 3.1% last week.
Ether drew $1,831, not far from Tuesday’s three-month low of $1,700 and recorded a third straight week of losses.
The UK’s financial regulator said last week that Binance, one of the world’s largest cryptocurrency exchanges, is purported to be the largest cryptocurrency exchange in the world. unable to perform any regulated activities and issue a warning to consumers about the platform.