On Tuesday, June 25th, the US Dollar (USD) started the day holding its ground as investors awaited key data on housing, regional manufacturing, and consumer confidence. Additionally, the market closely watched the May Consumer Price Index (CPI) data from Canada. The USD struggled to find demand on Monday due to a positive shift in risk sentiment, but managed to limit its losses by the end of the day. The USD Index lost over 0.3% daily, while Wall Street showed a mix of gains and losses. Early Tuesday, the USD Index remained consolidated below 105.50 as US stock index futures traded slightly higher.
The USD saw a decrease in value this week, particularly against the Australian Dollar. The table provided data that shows the percentage change of the USD against major currencies in the current week. The heat map illustrates the percentage changes of major currencies against each other, highlighting the base and quote currencies and their fluctuations. The Australian Dollar saw an improvement in consumer confidence while China expressed confidence in achieving their growth target for the year. The positive data from Australia and China contributed to the strength of the Australian Dollar, with AUD/USD continuing to rise.
In Canada, annual inflation, measured by the change in CPI, is expected to decrease slightly in May. The USD/CAD pair closed lower on Monday and continued its downward trend early Tuesday, reaching its weakest level in three weeks near 1.3650. USD/JPY corrected lower after nearing 160.00 on Monday, as investors hesitated to bet on further Yen weakness amid speculation about intervention. Japan’s Chief Cabinet Secretary reassured that they would closely monitor FX moves and take necessary actions. EUR/USD and GBP/USD both showed movements in response to USD weakness, with Gold also registering small gains on Monday.
Inflation FAQs provide insight into how inflation is measured, with headline inflation expressed as a percentage change in prices on a month-on-month and year-on-year basis. Core inflation excludes volatile elements like food and fuel and is the focus of economists and central banks. Core CPI, which excludes food and fuel inputs, is targeted by central banks, with levels above or below 2% impacting interest rates. High inflation usually results in a stronger currency due to higher interest rates. Gold historically served as a safe-haven asset during high inflation, but its value may fluctuate based on interest rate changes resulting from inflation levels.
In conclusion, the USD maintained its ground amidst awaited data releases, with fluctuations against major currencies this week. The impact of key economic indicators in various regions influenced currency movements, along with inflation levels and market sentiment. Investors observed shifts in FX markets and closely monitored developments for potential trading opportunities. As market conditions evolve, staying informed about economic data releases and their implications on currency trends remains crucial for traders.
