After Release Of Inflation Data, Value Of Dollar Falls To A 9-Month Low Against Euro

On Thursday, the value of the dollar recorded a major dip. The data from the forex market shows that the value of the dollar has recorded a dip against the euro.

The report shows that the value of the dollar has hit almost a nine-month low versus the euro. This happened as the US Feds shared the inflation data.

Inflation is Easing

The data that came out for the inflation rates shows that it is easing. This is a clear indication that the inflation rates are going down and that would prompt the Feds to lower their aggression in terms of interest rate hikes.

For several months, the inflation rates have been moving lower, which goes to suggest that the Feds will continue lowering the aggression.

They are highly likely to lower the interest rate hikes and may bring them down to 25 bps. If not 25 bps, then they may completely get rid of the interest rate hikes.

This would eventually lower the price of the dollar even more. This is the reason why the investors are not spending money to push the trend and the dollar price is moving downward.

The Yen Price has Surged

As the value of the dollar has plummeted, the value of the Japanese yen has continued to move higher. This is the reason why the value of the yen has moved to a six-month high compared to the trading price of the greenback.

It has been reported that going forward, the Bank of Japan may take the necessary actions to control its increasing inflation rates.

Japan is currently facing a constant rise in inflation rates. Therefore, they have resorted to increasing the interest rates to bring them under control.

This is the reason why the trading price of the dollar is gaining more strength while the trading price of the dollar is growing weaker.

CPI Data for the US

The consumer price index (CPI) data for the United States has shown that it has dipped by 0.1% in the past month.

The report shows that it is for the first time since May 2020 that a drop has been marked for the CPI. It had happened at a time when the country was dealing with the pandemic.

It was the first wave of the pandemic that the country was busy dealing with.

When the US Feds started to increase the interest rates, it had become the fastest monetary policy tightening that the country had witnessed since the 1980s.

Following the implementation of strict and tight monetary policies, the price pressures have started to move aside.

The country is now recording ease in the supply chains and the situation is getting back to normal for the US economy. Still, the fear of recession is there and the Feds are trying their best to deal with it.

To be precise, it has been three months since the core inflation rates have been easing in the country, forming a unique trend. In the wake of the trend, the Feds may start loosening their grip on the interest rate hikes.

The traders expect that on February 1, the situation will go in favor of lowering the interest rate hikes. The people will be happy but the value of the dollar will lose its momentum.

Dollar’s Performance against Major Currencies

The data shows that the value of the dollar has experienced a 0.83% dive against the trading price of the euro. At the time of writing, the dollar price versus the euro is $1.0845.

The value of the dollar has dipped by 0.56% versus the sterling. At the time of writing, the dollar value against the sterling is trading at $1.22195.

When it comes to the Japanese yen, the drop rate of the USD is much higher compared to the euro and the sterling. The data shows that the drop rate is 2.7%.