Dollar Sheds Some Ground Against Major Counterparts Ahead Of Inflation Data
2024-07-09
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(fxcue news) - The U.S. dollar drifted lower on Wednesday as bond yields dropped, but the downside was not any significantly pronounced against some of its major counterparts as Fed Chair Jerome Powell said price growth is not sustainably slowing to the central bank's 2% target.
During congressional testimony, Powell said more "good data" would strengthen the central bank's confidence inflation is moving sustainably toward its 2% target and lead to a potential interest rate cut.
Powell also warned of the risk that leaving interest rates at an elevated level for too long could jeopardize economic growth.
"In light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face," he said. "Reducing policy restraint too late or too little could unduly weaken economic activity and employment."
Traders awaited the U.S. consumer price inflation data, due on Thursday. Economists expect the annual rate of consumer price growth to slow to 3.1% in June from 3.3% in May, while the annual rate of core consumer price growth is expected to hold at 3.4%.
The dollar index dropped to 105.00, down by about 0.13% from the previous close.
Against the Euro, the dollar weakened to 1.0830 from 1.0813. Against Pound Sterling, the currency fell to 1.2849 from 1.2787. The dollar eased to 161.70 yen from 161.30.
Against the Aussie, the dollar edged down marginally to 0.6747. The greenback firmed against Swiss franc, fetching CHF 0.8996 a unit, and against the Loonie, it weakened to C$ 1.3622.
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