US Dollar Steady, Market Weighs Easing Inflation and Iran Conflict
The US dollar index moved relatively flat near 101 on Wednesday (July 15th). Market participants were still weighing weaker-than-expected US inflation data, amid escalating tensions between the US and Iran, which could potentially rekindle inflationary pressures.
The US Producer Price Index (PPI) unexpectedly fell 0.3% in June, lower than market expectations of no change. On an annual basis, both primary and core producer inflation were also below expectations.
This data follows the release of the US CPI on Tuesday, which was also lower than expected. The combination of lower CPI and PPI figures reinforces the signal that inflationary pressures are beginning to ease, although risks from energy prices remain looming due to the US-Iran conflict.
In terms of market impact, the US dollar has the potential for limited movement as markets begin to trim expectations for a Fed interest rate hike. The probability of a September rate hike is now estimated at around 49%, down from 70% last week. However, if the US-Iran conflict pushes oil prices up again and raises inflation risks, the dollar could regain support as a safe-haven asset. (asd)
Source: Newsmaker.id
