• The market awaits more evidence about US interest rate cuts
The U.S. dollar rose in the European market on Monday to resume recovering from low levels, which were temporarily halted in the previous session, as the activity of buying from cheap levels, and supported by the recovery of the yield on ten-year US Treasuries.
Over the coming days, investors await the release of key US inflation data for July, which provides more clues about US interest rate cuts this year.
Price overview
• US Dollar Index Price Today: The Dollar Index rose by 0.1% to (103.24) points, from the opening level of today’s trading at (103.14) points, and recorded a high of (103.13).
• The index ended Friday’s trading down 0.1%, in the first daily loss in the last four days, with recoveries from a seven-month low of 102.16 points.
• The US dollar index lost 0.1% last week, in the third consecutive weekly loss, due to full pricing of the prospects of US interest rate cuts in September and November.
US Bond Yield
The yield on the ten-year US Treasury bond rose on Monday by 0.65 percentage points, resuming gains that were temporarily halted on Friday, approaching the highest level in at least two weeks, which provides support to US dollar levels.US interest rate•According to CME Group’s ‘FeedWatch’: Pricing the prospects of a US interest rate cut by about 50 basis points at the September meeting is currently stable at 46%, and pricing the possibilities of a cut by about 25 basis points at 54%.
In order to reprice the above contracts, investors are awaiting later this week the release of producer and consumer price data for July, which are the main indicators for measuring inflation in the United States.
• Producer price data is released on Tuesday, which is a leading indicator of what consumer prices will be in August, and consumer price data for July will be released on Wednesday.
Forecast for the performance of the US dollar
If inflation data comes hotter than expected, the odds of a 50 basis point cut in September will decline in favor of a 25 basis point cut, which is expected to boost the US dollar’s gains in the foreign exchange market.See original article
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