Dear clients,
The US dollar fell to a yearly low against a basket of currencies on Friday, while the euro hit a yearly high as traders raised expectations that the US Federal Reserve’s rate hike cycle will soon end amid signs of slowing inflation.
Data from the US Department of Labor on Thursday showed that the producer price index (PPI) hit its lowest reading in nearly three years last month. A day earlier, inflation data pointed to moderation in consumer prices.
The US dollar fell again on Friday, with the US dollar index, which measures the currency against six major currencies, slipping to around a yearly low of 100.78.
It was last down 0.15% at 100.82 and approaching a weekly decline of more than 1%, the steepest drop since January.
Meanwhile, the euro rose to a new yearly high of $1.1075, surpassing Thursday’s previous high.
Money markets are estimating with a 69% chance that the Fed will raise interest rates by 25 basis points next month, although a number of cuts are also expected from July through the end of the year, with rates set to just above 4.3% in December.
Adding to signs of easing global inflationary pressures was an unexpected surge in Chinese exports, which rose 14.8% in March from the same month a year earlier.
