Investing.com – In European morning trade on Thursday (10th), the dollar was slightly lower, paring some of its earlier gains, as investors awaited the latest U.S. inflation data.
As of 16:54 Beijing time (03:54 a.m. ET), the dollar, which measures the trend of the dollar against six trade-weighted major currencies, fell 0.04% to 110.412; it fell 0.12% to 110.42. The benchmark U.S. Treasury yield was at 4.094%.
The focus of the day was on the US October CPI, which is expected to help investors assess whether to raise interest rates by another 75 basis points at the December meeting, or reduce the intensity of interest rate hikes to only 50 basis points.
Analysts now expect it to fall to 8%, the lowest level since February; however, it is expected to rise to 0.6% from 0.4% in September.
The core forecast, which excludes energy and food prices, rose to 6.6% from 6.5%, down slightly from 0.6% the previous month to 0.5%.
“If core inflation is in line with consensus at 0.5% m/m, then market expectations for federal funds to hit 5% next year remain unchanged, supporting the dollar,” analysts at ING said.
Meanwhile, cryptocurrency market turmoil also supported yesterday’s move in the U.S. dollar. Earlier, the cryptocurrency exchange Binance announced that it would abandon the acquisition of rival FTX, triggering investors to sell digital currencies and flock to the US dollar for safety.
In addition, the outcome of the US midterm elections is still not entirely clear, but the Republicans are expected to control the House of Representatives by a narrow margin, and the US executive and legislative bodies may be deadlocked for the next two years.
“The fact that the Republicans control the House of Representatives while Democrats control the Senate may be slightly positive for the dollar, as a Biden administration can only focus on executive orders,” ING said.
It fell 0.21% to 0.9990; it rose 0.32% to 1.1392; and the highly sensitive to risk sentiment fell 0.36% to 0.6407.
It fell 0.11% to 146.27. The yen has recovered from its weakest level recently touched since 1992. Bank of Japan Governor Kuroda Haruhiko said today that the Japanese government has properly dealt with speculative foreign exchange movements.
But he also said it was not yet at the stage where an exit from easing could be discussed. He said that raising interest rates now will hurt the economy, which is still in the process of recovering from the impact of the epidemic, so raising interest rates now is not advisable.
It rose 0.06% to 7.2460 as the pandemic continued to weigh on the economic outlook and exchange rate.
[This article is from Yingwei Caiqing Investing.com, to read more, please log on to cn.investing.com or download Yingwei Caiqing App]
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Compilation: Liu Chuan