The dollar is near a month’s peak against a basket of currencies after the inflation jump

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The dollar settled near a one-month peak against a basket of currencies yesterday, as investors tried to ascertain whether the US Federal Reserve would change its tone on stimulus after the recent jump in US inflation.
According to “Reuters”, there was little change in the dollar index at 90.499, after it recorded its highest level in one month yesterday, despite the mixed US economic data.
And US retail sales fell more than expected in May, while April’s data was revised to record a sharp rise and far above its pre-pandemic level.
The data reinforced the belief in a strong recovery of the economy with the return of spending to services again from goods, as vaccination campaigns allowed Americans to travel and participate in other activities.
Separate data showed wholesale price inflation accelerating to 6.6%, the largest increase since November 2010.
The euro was stable at $1.2129, unchanged on the day, but it is struggling to recover from last week’s losses after the European Central Bank pledged to keep stimulus unchanged during the summer months.
The yen was little changed at 110.06 against the dollar, near the two-month low of 110.325 yen, which it touched last month, and the Bank of Japan is expected to extend some stimulus measures in the face of the pandemic this week.
Sterling, the strong performer since the start of the year, hit a one-month low of $1.4035 yesterday, despite stronger-than-expected employment data. And settled yesterday in the latest trading at 1.40885 dollars.
The Australian dollar lacked momentum after the country’s central bank hinted yesterday that it would like to extend its bond-purchasing program next month.
The currency was trading at $0.7697, not far from the seven-week low of $0.7646, which it touched earlier this month.
In the cryptocurrency markets, Bitcoin was trading at around $40,295, after hitting a nearly one-month high of $41,341 on Tuesday, backed by a pledge of new investment by Micro Strategy, a major supporter of the coin, and an upbeat tweet from Tesla President Elon Musk.
In addition, gold settled, and moved in a narrow range yesterday, as investors awaited the outcome of the latest meeting of the US Federal Reserve for indications about a possible reduction of economic support measures, while the dollar’s rise imposed pressure on the yellow metal.
There was little change in gold in spot transactions at $ 1859.32 an ounce by 05:23 GMT. And gold fell to its lowest level since May 17, to $ 1843.99, on Monday.
US gold futures rose 0.2 percent to $1,860.40.
“Gold is down over a few days, and this reflects growing expectations that the Fed’s rollback of quantitative easing may start sooner than the market currently expects,” said Ilya Spivak, currency strategist at the DailyFix.
He added, “Gold entered the next stage lower, the imminent support at this stage is at about 1850 dollars, and if we breach that with the help of the reserve meeting over the next 24 hours, gold may head towards 1800 dollars.”
Yesterday’s data revealed that US retail sales fell more than expected in May, while producer prices jumped 6.6 percent year-on-year during the month, the biggest increase since November 2010.
Recent data showing a jump in US consumer prices has raised concerns about rising inflation, but US central bank officials said inflationary pressures are temporary and ultra-accommodative monetary policies will remain in place for some time.
As for other precious metals, silver gained 0.3 percent, to $27.71, and palladium fell 0.2 percent, to $2757.77, while platinum fell 0.2 percent, to $1150.99.





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