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New York (Reuters) – The dollar retired on Tuesday, giving – some of its strong benefits a day before after the inflation reading reached the expectations of the market below.
The Department of Labor said that the consumer price index increased by 0.2% last month, below the expectations of economists surveyed for reteters for a gain of 0.3%, after falling by 0.1% in March.
However, inflation is likely to collect steam in the coming months, as North -Americans increase the cost of imported goods.
“Although inflation holder number was better than expected, there are indicators that the rates have already increased prices,” said Brian Jacobsen, an annex economist Wealth Management to Menomonee Falls, Wisconsin.
“Reducing the temperature of the rates is good, as the effects of the price will begin to filter in the consumer basket quite quickly,” he said. “Commercial reestablishment with China could mean that the FED can return to business as usual and gradually resume cutting rates by the end of this year.”
The dollar index, which measures the Greenback against a basket of coins, fell 0.67% up to 101.05, with the euro up to 0.81% to $ 1,1177.
The Greenback accumulated more than 1% Monday on optimism that a tariff agreement between the United States and China could cool the trade war between the two largest economies in the world, which had increased the risk of a global recession.
The dollar continues to be almost 3% below the level of April 2, when President Donald Trump announced tariffs, which caused investors abroad to reduce their exposure to US shares and bonds.
Against Japanese Ien, the dollar weakened 0.57% to 147.6, after meeting with more than 2% a day before, while the risk of mood was hungry for safe security assets.
The Greenback dropped 0.54% up to 0.841 against the Swiss franc after riding 1.6% on Monday.
The dollar fell 0.02% to 7,197 against Chinese yuan out of the sea, after falling to a minimum of six months of 7,1779.
The reduction in United States-Chinese commercial tensions has caused the market participants to mark the likelihood of recession, along with the expectations for the calendar and the magnitude of the interest rate cuts of the Federal Reserve this year.
The main runners, including Goldman Sachs, JP Morgan and Barclays, have recently reduced their recession forecasts in the United States and their vision of the FED’s politics flexibility.
A reduction in rates of at least 25 basic points is considered to be likely to be at the Central Bank’s September meeting, compared to the previous view of a reduction in the July meeting, according to LSEG data. Around 51 basic cuts are priced 2025.
