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ShreeMetalPrices: Dollar gains after US Inflation eases for 9th straight month


The U.S. dollar made a gain in early European trade on Thursday, but it was still under pressure. As the likelihood of an early halt to the Federal Reserve’s cycle of rate tightening was increased by lower-than-expected inflation figures.

The dollar index, which measures the value of the dollar against a basket of 6 different currency, was trading 0.1% higher at 101.243 at 02:00 ET (06:00 GMT). Just above the session low of 101.138 set earlier in the day after falling by 0.6% over night.

According to data released on Wednesday, U.S. consumer prices increased 0.1% in March. This resulted in a yearly rise of 5.0%, the weakest 12-month increase since May 2021.

The core Consumer Price Index, which excludes unpredictable food and energy costs, rose 5.6 percent on a yearly basis, up from 5.5 percent the month before. Which was below the 5.2 percent forecast, although underlying pressures for inflation remained high.

These figures suggest that the US Federal Reserve will most likely increase interest rates once more the following month.

The minutes from the most recent Fed meeting in March revealed predictions of a light recession later this year. Raising hopes that the United States central bank may slash interest rate before the year is out.

US Economy Recovery Potential is Limited

Producer rates, which are anticipated to decrease from the same period last year, and jobless claims. Which are anticipated to nudge higher than the preceding week, are two further inflation data points that will be released on Thursday.

While the European Central Bank is expected to continue raising interest rates for a longer period of time. Than its American counterpart in order to contain increasing prices. The EUR/USD dipped slightly lower to 1.0987 after reaching a more than 2-month highest of 1.1005 early in the session.

François Villeroy de Galhau, the head of the French central bank. Stated in an interview on Wednesday that. “We may still have a little ways to go on increasing rates at our next meetings.” Though he added that “I think it premature to make a decision now what we will do in May.”

German inflation figures, issued earlier on Wednesday, showed the depth of the ECB’s challenges. As prices for consumers in the leading economy of the euro zone increased 0.8 percent on the month and 7.4% annually in March.