The dollar is weakening significantly today, deepening losses after the June US inflation report. Consumer price growth slowed down last month and the US Federal Reserve (Fed) could raise interest rates only once more this year.
The lowest
The dollar index, which reflects the value of the dollar against a basket of six major world currencies, showed a decline of almost 1.2 percent at 18:00 CET and hovered around 100.59 points. It was the lowest since last April. The euro added one percent to the dollar at the same time to $1.1123.
The dollar fell 1.5 percent against the yen to 138.23 yen. The single European currency was depreciating half a percent against the dollar to 153.75 yen. Against the Swiss franc, the dollar hit its lowest since 2015.
Slowing by 3 percent
Annual consumer price growth in the United States slowed to three percent in June from four percent in May. The inflation rate fell for the twelfth consecutive month and is at its lowest since March 2021, according to a report released today by the U.S. Labor Department. The drop in inflation was a little more pronounced than analysts had expected. Those polled by Reuters had estimated June inflation at an average of 3.1 percent.
“The Fed has painted itself into a corner with its expected rate hike on July 26. The data doesn’t support that it needs to raise rates,” said economist Brian Jacobsen of Annex Wealth Management. “Since they are being stubborn, they are going to raise interest rates anyway. Fortunately, the market was expecting that. The end of rate hikes is coming,” he added.
Source Czech Press Office
