The U.S. dollar appreciated against its major counterparts in the European session on Tuesday, as the nation’s consumer prices rose at the fastest pace in thirteen years in June, backing hopes for an early tapering of the asset purchase program by the Federal Reserve.

Data from Labor Department showed that consumer price index jumped by 0.9 percent in June after climbing by 0.6 percent in May. Economists had expected consumer prices to rise by 0.5 percent.

Excluding food and energy prices, core consumer prices still jumped by 0.9 percent in June following a 0.7 percent increase in May. Core prices were expected to rise by 0.4 percent.

The annual rate of consumer price growth accelerated to 5.4 percent in June from 5 percent in May, reaching the highest level since a matching spike in August of 2008.

Core consumer prices were up by 4.5 percent year-over-year in June, reflecting an acceleration from the 3.8 percent jump in May. Core prices saw the biggest annual increase since November of 1991.

Federal Reserve Chair Jerome Powell is scheduled to testify on the semi-annual monetary policy report before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday.

Powell is likely to offer more clarity on the timeline for reducing the asset purchase program.

The greenback showed mixed performance against its major peers in the Asian session. While it held steady against the franc, it fell against the pound and the euro. Versus the yen, it climbed.

The greenback added 0.5 percent to a 5-day high of 0.9200 against the franc. At Monday’s close, the pair was valued at 0.9150. Should the greenback strengthens further, it is likely to test resistance around the 0.94 region.

Data from the Federal Statistical Office showed that Switzerland’s producer and import prices increased in June.

Producer and import prices rose 2.9 percent year-on-year in June.

The greenback was up by 0.5 percent against the euro, at a 5-day high of 1.1794. The pair had closed Monday’s deals at 1.1859. Next immediate resistance for the greenback is likely seen around the 1.16 level.

Data from Destatis confirmed that Germany’s consumer price inflation eased in June for the first time in six months.

The consumer price index rose 2.3 percent year-on-year following a 2.5 percent increase in May, which was the highest rate in nearly a decade.

The greenback rose to a 4-day high of 1.3800 against the pound, registering a rise of 0.6 percent from yesterday’s closing value of 1.3879. Further rally in the currency may find resistance around the 1.36 region.

Data from the British Retail Consortium showed that UK retail sales logged a double-digit growth in June driven by the easing of lockdown restrictions.

In June, retail sales advanced 13.1 percent on a yearly basis. Like-for-like sales were up 17 percent from the same period last year.

The greenback approached a 4-day high of 0.7427 against the aussie, after a 6-day drop to 0.7503 at 11:15 pm ET. The aussie-greenback pair was worth 0.7472 at Monday’s close. The greenback is likely to face resistance around the 0.72 region, if it gains again.

Survey results from the National Australia Bank showed that Australia business confidence weakened in June due to rising number of infections in New South Wales and subsequent lockdowns.

The business confidence index dropped to 11 from 20 in May. The decline in confidence was led by declines in NSW and Queensland. Confidence weakened in all industries except mining and manufacturing.

The greenback spiked up to its highest level since November 2020 against the kiwi, at 0.6917. That followed a 5-day low of 0.7010 seen at 11:15 pm ET. At yesterday’s trading close, the pair was quoted at 0.6977. Next near term resistance for the greenback is found around the 0.68 level.

Data from Statistics New Zealand showed that New Zealand food prices climbed 2.8 percent on year in June – accelerating from the 1.8 percent increase in May.

On a monthly basis, food prices were up 1.5 percent seasonally adjusted and 1.4 percent unadjusted.

The greenback moved up to a 4-day high of 1.2539 against the loonie from yesterday’s close of 1.2453. The greenback may face resistance around the 1.27 region.

The greenback was 0.2 percent higher against the yen, at a 5-day high of 110.56. The pair was worth 110.33 when it ended deals on Monday. Extension of the greenback’s uptrend may lead it to a resistance around the 112 region.

U.S. monthly budget statement for June will be released in the New York session.


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