The dollar gains strength before a crucial inflation report in the US
Shafaq News/ The dollar approached the significant threshold of 150 yen and maintained stability in anticipation of the release of crucial inflation data in the United States, on Tuesday. Concurrently, the cryptocurrency bitcoin sustained a value around $50,000 for the second consecutive day.
Early Asian trading exhibited limited activity due to the Lunar New Year holiday in China and Hong Kong, as traders prepared for the unveiling of US consumer price data. The dollar was observed trading at 149.39 yen in recent transactions, inching closer to the closely monitored 150 level, which analysts anticipated might prompt additional measures by Japanese officials to fortify the currency.
The yen, which has depreciated by over five percent against the dollar this year, continues to face ongoing downward pressure as investors revise their expectations regarding the scope and pace of the US Federal Reserve's monetary stimulus.
Furthermore, the euro experienced a marginal decrease of 0.03 percent, settling at 1.0768 dollars, while the pound sterling also slipped by 0.07 percent to 1.2620 dollars. The Australian dollar similarly declined by 0.08 percent, reaching 0.6526 dollars. In contrast, the dollar advanced by 0.02 percent to 104.16 against a basket of currencies, and the New Zealand dollar receded by 0.11 percent to 0.6121 dollars.
Meanwhile, bitcoin surged by 0.64 percent to 50,155 dollars, surpassing the $50,000 mark for the first time since 2021 on Monday.
Noteworthy, The United States inflation report has the potential to offer new insights into the timing and extent of potential interest rate cuts by the Federal Reserve this year.
The US Bureau of Labor Statistics (BLS) announced that the Consumer Price Index (CPI) for all urban consumers rose 0.2% in January 2024, and increased 2.9% over the last 12 months. The CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
The main contributors to inflation were food, medical care, and transportation services. The index for all items less food and energy, which is often used as a measure of core inflation, also rose 0.2% in January and 3.4% over 2023. The inflation data was closely watched by investors and policymakers, as it could affect the Federal Reserve's decisions on interest rates and monetary stimulus.
