The website Investing.com
In early European trade on Thursday, the dollar weakened versus high-yielding currencies but strengthened against the yen as the market digested the implications of Wednesday’s higher-than-expected U.S. inflation statistics.
On Friday, the Dollar Index that measures the value of the greenback against a basket of developed market countries fell by 0.1 percent to 93.995, moving below the psychological level of 94 for the first time this week as sterling and other major currencies gained ground.
Only versus the yen did the dollar make significant gains, rising by 0.3 percent to 113.53, on the back of rising forecasts for a widening of the interest rate difference between Japan and the United States.
In September, the U.S. inflation rate set a new 13-year high of 5.3 percent, but core inflation remained at 4.0 percent due only to a significant decrease in flight prices.
Raphael Bostic, Mary Daly, and Thomas Barkin, all senior Federal Reserve officials, will get a chance to weigh in on the day’s events.
Released on Wednesday, minutes from the Fed’s most recent policy meeting confirmed predictions that the central bank will begin withdrawing assistance next month.
The day’s economic calendar begins with U.S. weekly unemployment claims, which are expected at 8:30 AM ET (1230 GMT).
The dollar rose against the Turkish lira to a new record high of 9.1872 percent after President Recep Tayyip Erdogan sacked three deputy central bank governors, severely weakening the central bank’s independence and reputation as an inflation fighter.
At least one CBRT decision-making council member was let off after voting against the surprise interest rate decrease that took place that month amid inflation hovering above 20 percent.
A higher-than-anticipated 26-year high in producer price inflation of 10.7% in September sent the Chinese yuan down.
The Chinese government is considering loosening monetary policy in response to the prolonged real estate loan crisis.
A fix of 6.4414 for the official yuan is the highest in over a month.
Following this week’s government decision to allow industrial energy rates to rise in order to relieve strain on China’s utilities, further inflationary pressure is expected.
Against the dollar, the Chilean peso has recovered from a 17-month low after the central bank hiked its benchmark rate by a sizable 125 basis points to 2.75 percent, over the projected 100 basis point rise.