Dollar Gains With Focus on US Data, Yen Lags
A gauge of the dollar traded slightly stronger on Friday as investors await a raft of US data next week that may shed more light on the timing and scale of Federal Reserve interest-rate cuts this year. The Japanese yen was among worst performers in the Group of 10 against the greenback.
The Bloomberg Dollar Spot Index rose 0.1% Friday, oscillating between gains and losses, after five days of declines.
The index lost 0.5% this week.
Reports due in the coming week include inflation and producer prices.
Economists anticipate a measure of underlying US inflation to pick up in July in part because of higher goods prices as tariffs continue to be passed on to consumers.
“I think risk-reward heading into CPI is for a modest dollar bounce as any upside surprise could challenge market pricing of almost a full cut by September,” said Jayati Bharadwaj, a strategist at TD Securities. “And if CPI is weak—we already have one full cut”.
The dollar gauge recovered Friday after a drop on Thursday on the news that President Donald Trump tapped Council of Economic Advisers Chairman Stephen Miran for a Fed governor.
“It’s not clear how soon he would be able to join the Fed with the Senate in recess till September,” said Aroop Chatterjee, a strategist at Wells Fargo. “Even if the Senate expedites, the December FOMC looks more realistic than September or October. That would mean that Miran basically has two meetings before his term expires”.
“We are not surprised that the market has faded the initial USD weakness,” he said, citing Miran’s limited implications for the dollar.
Non-commercial investors — a group of speculative market players that includes hedge funds, asset managers and other traders — reduced their short dollar bets to $7.1 billion for the week ended August 5, least bearish in about four months.
EUR/USD fell 0.2% to 1.1643
USD/JPY rose 0.4% to 147.71
Japan’s Economy Minister says that any US tariff on semiconductors — if imposed — would not disadvantage Japan compared with other countries.
Source : Bloomberg
