Tuesday 10 Dec

Stock Market

Rise of dollar coincides with decline of yen. Expectations of a cut in interest rates in the USA


Rise of dollar coincides with decline of yen. Expectations of a cut in interest rates in the USA

The US dollar rose on Thursday after the release of US inflation data that came in higher than expected, which led to a reduction in expectations of a rate cut by the Federal Reserve (US Central Bank) in the coming months.

The dollar rose against the Japanese yen to reach levels of mid-1990, at 153.24, while the yen fell to its lowest level in 34 years against the dollar on Wednesday. The Japanese authorities have announced their intention to intervene to counter excessive currency fluctuations.

 On the other hand, inflation data in the United States indicates that the consumer price index rose by 0.4% in March, exceeding expectations of a 0.3% increase. This has reduced expectations of an interest rate cut this year.

 In Asian markets, the yen rose 0.17% to 152.93 against the dollar, compared to 153.24 on Wednesday. This decline is attributed to the market's response to positive US economic data.

 While the dollar's rise may be increasing, gold remains resilient as a safe haven, having seen gains for eight consecutive trading sessions. It is noteworthy that gold, silver, and platinum prices are reflecting divergent movements in this context.  

  This rise in the dollar comes amid expectations that the US Federal Reserve will remain cautious in implementing monetary easing policies, in light of current global economic challenges.

 ECB holds rates steady

 The European Central Bank (ECB) today kept its key interest rates unchanged at 4.0%, signaling an improving outlook for inflation amid slowing economic growth.

With inflation in the eurozone continuing to decline, the ECB sent clear signals that it may be on the verge of cutting interest rates in the near future.

 The ECB explained that if its confidence in the continued path of inflation towards its target increases, it would be appropriate to lower the current interest rate level. This comes as part of the bank's ongoing efforts to stimulate the economy and boost inflation.