The US dollar has kept slackening vs the majors amid combined data from the USA leading to deeper uncertainties about further interest rate lift by the Federal Reserve, according to a news report. At the same time, higher inflation led to skyrocketing US 10Y bond yields.
At first, the US dollar reportedly rebounded on the data released by the US Department of Commerce yesterday. According to the report, the US consumer price index rose 0.5% in January; the increase year-on-year was 2.1% (forecast – 1.9%).
With higher inflation, the Federal Reserve can revise the interest rate earlier than expected. Specifically, the higher-pace interest rate increase boosted the yields of US 10Y bonds by 2.928%. If the yields reach 3%, the markets can become volatile, commented analysts.
However, the US dollar showed just short-lived upturn and stopped rising just after the retail sales report released in the USA yesterday. As the report reads, retail sales dropped 0.3% in January (forecast – 0.2%). Such results made analysts doubt about Federal Reserve's ability to accelerate interest rate growth to slow down inflation.
The US Dollar index was seen at 88.64 today.
The US dollar-to-yen exchange rate dropped to 106.41 touching the bottom since November 2016.
Japan's Finance Minister commented today that he did not consider the current yen changes to be a reason for interference. Moreover, as he said, Tokyo does not have the response plan for the exchange rate changes.
The euro and sterling were at 1.2490 and 1.4087 vs the greenback respectively.
The franc improved with USD-CHF reaching 0.9250. The AUD-USD rate is stable at 0.7927, while NZD-USD went up to 0.7385.