Dollar Drops While Pound Soars After UK Inflation
The dollar weakened broadly while the British pound touched the highest level in over three years after hot domestic inflation. Comments from South Korea’s finance ministry about ongoing FX discussions with the US have put traders on alert as they wait for more comments from G-7 meetings in Canada. The Norwegian krone is outperforming peers as oil prices jump.
The Bloomberg Dollar Spot Index falls as much as 0.5%, extending its decline to a third day.
“Markets are in risk off mode after reports overnight that Israel is planning to strike Iran nuclear facilities,” said Win Thin, global head of markets strategy at Brown Brothers Harriman & Co. “Yet the dollar is down and UST yields are up, which supports the view that markets have lost confidence in the US”.
GBP/USD rose by as much as 0.6% to 1.3469, its highest since February 2022 after data showed UK inflation jumped more than forecast in April to its highest rate in over a year.
USD/JPY fell 0.5% to 143.86.
Japan’s Finance Minister Katsunobu Kato said on Tuesday that he’s arranging a bilateral meeting with US Treasury Secretary Scott Bessent this week to discuss topics including currency matters.
EUR/USD advanced for a third day, up by 0.5% to 1.1337.
ECB Governing Council member Martins Kazaks said interest-rate cuts are nearing an end, assuming the base case for inflation stabilizing at 2% over the coming months comes to pass.
Source: Bloomberg
