Dollar Price Dips Due to Mixed US Data
The value of the US dollar has dropped significantly in the running week. The value of the USD has dipped after the Feds highlighted that the upcoming situation for the US economy would be overshadowed by uncertainties.
USD Experiences Three-Week Lows
The price chart shows that the value of the USD has dropped to a three-week low as confirmed by the statistics coming in from the Friday trading session.
This is mainly due to the mixed data shared by the Feds surrounding the inflation and interest rate hikes. The investors have been heavily impacted by the outweighed inflation rates. Even the economic data is showing very mixed results, increasing the worries of the investors even more.
According to the analysts, a huge position-squaring at the end of the month of July was also a major factor in the value of the USD has dipped.
Inflation Rates Continued Rising in June
It was early July when the Feds had shared economic statistics for the month of June. They revealed that even in the month of June, the inflation rates continued rising, growing higher within the red zone.
Due to the constantly rising inflation rates in the United States, the Feds will continue increasing the interest rates. This is exactly what the Feds have done as they are aggressively increasing the interest rates in order to deal with the growing interest rates.
Until the inflation rates become stabilized or start moving downwards, the Federal Reserve may continue raising the interest rates as they deem necessary.
PCE Performance in the Past Month
It was in the month of June when the PCE price index rose by 1.0%. This is the largest increase that the PCE price index has recorded since 2005. It was in the month of September 2005 when the PCE price index surged by 1.0%. It was in the month of May 2022 when the PCE price index was recorded to be 0.6%.
In the month of April 2022, the PCE price index was at 0.3% but as the volatile energy and food components were excluded, the PCE price index rose in the month of June to 0.6%. On Friday, the US dollar index recorded an overall 0.3% dip against six major currencies.
The US dollar index shows that the value of the euro increased by 0.2% against the USD, moving up to $1.0213. The value of the USD dipped 0.7% versus the yen, coming down to 133.42.
According to the performance report for the greenback, its value has experienced a great percentage fall in a month since July of 2020. The forex market data has confirmed that the investors were placing short bets on the yen versus the USD.