Home Stock Market The dollar fell to a three-week low as inflation fears are seen...

The dollar fell to a three-week low as inflation fears are seen now


© Reuters. FILE PHOTO: Banknotes of one US dollar are seen in front of the displayed stock chart

By Hideyuki Sano

TOKYO (Reuters) – The dollar fell to a multi-week low against the euro and yen on Wednesday, after a rising US consumer price meter did not raise concerns about accelerating inflation and the Federal Reserve dropped, pushing US bond yields down. .

The dollar fell 0.2% to 108.80 yen, hitting a three-week low, down about 2% from a one-year high at the end of last month.

The euro rose 0.1 percent to $ 1.1960, hitting its highest level since mid-March, as it extended its rally from a five-month low of $ 1,1704 set on May 31. 3.

Against the Swiss franc, the US currency slid to 0.9201 franc, near a six-week low.

While the dollar stuck near its familiar range against most other currencies, the dollar’s index against a basket of six major units fell to as low as 91,724, the lows. as of March 22.

The greenback’s depreciation occurs when US bond yields drop, thereby reducing its appeal, as steady demand for a 30-year bond auction overwhelms consumer inflation.

The yield on a 10-year Treasury note fell to 1,620%, also the lowest level since the end of March.

The US consumer price index in March rose 0.6% from the previous month, the largest increase since August 2012 and up 2.6% from a year earlier, 0.1% higher. percentage points compared to market expectations.

The core CPI, excluding volatile foods and energies, was also slightly stronger than expected, with a 1.6% y-o-y increase.

“Inflation is expected to accelerate in the 4-6 quarter,” said Masafumi Yamamoto, currency strategist at Mizuho Securities.

Speculation that stronger inflation could prompt the Federal Reserve to ease its quantitative easing measures and lower committed lower rates was the main driver of the dollar’s rally in the first quarter.

Minori Uchida, currency strategist at MUFG Bank, said: “It seems that the market has priced in during the normalization of the economy as US bond yields have risen significantly, with yields coming almost to 5 years. reach 1% at a time ”.

The Bank of America has said it will look into temporary inflation and analysts expect it to allow inflation to rise hotter than previously expected before raising rates.

Philadelphia Fed President Patrick Harker said on Tuesday that it is unlikely that inflation will get out of control this year.

In another development, the New Zealand dollar rose 0.4% to $ 0.7086 after the country’s central bank maintained official interest rates and a stable and broad asset purchase program as expected. ants.

The Singapore dollar rose 0.25% to S $ 1.3376 per US dollar after the Monetary Authority of Singapore (MAS) kept the exchange rate policy settings intact.

The Russian ruble rose about 2% overnight after US President Joe Biden called on Russian President Vladimir Putin to ease tensions between Russia and Ukraine.

Biden phoned Putin to suggest they meet in a third country, in a sign of concern about out-of-control tensions during the Ukraine crisis.

In terms of cryptocurrencies, bitcoin hit a record high of $ 63,860.71 before cryptocurrency exchange Coinbase went public on the Nasdaq later in the day.

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Bid currency price at 322 GMT

Description of Last RIC in the United States Close Pct Change YTD Pct High Bid Low Bid Low bid

Previous change

Meeting

Monetary unit of the European Union

$ 1,1963 $ 1,1949 + 0.12% -2.09% +1,1963 +1,1940

Dollar / Yen

108.8400 109.1000 -0.22% + 5.40% +109.0500 +108.8100

Euro / Yen

130.19 130.30 -0.08% + 2.58% +130.3500 +130.0500

Dollar / Swiss

0.9196 0.9206 -0.08% + 3.97% +0.9207 + 0.9198

British Pound / Dollar

1.3768 1,3753 + 0.14% + 0.81% +1,3772 +1,3752

Dollar / Canadian

1,2541 1,2534 + 0.06% -1.51% +1,2547 +1,2530

Aussie / Dollar

0.7661 0.7644 + 0.21% -0.42% +0.7664 +0.7635

NZDollar / Dollar

0.7087 0.7057 + 0.45% -1.30% +0.7089 +0.7048

All points

Points in Tokyo

European point

Volatilities

Tokyo forex market information from BOJ



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