The US dollar fell in the European market on Wednesday to deepen its losses for the fourth consecutive day, recording the lowest level in a week, approaching the lowest level in seven months recorded earlier this month, this decline comes under the pressure of the current decline in the yield on ten-year US Treasury bonds.
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The fall in US yields comes after lower-than-expected data on producer prices in the United States boosted the odds that the Federal Reserve will cut interest rates by about 50 basis points in September.
In order to reassess those possibilities, investors await later in the day the release of consumer price data for July, which is the main measure of inflation in the United States.
Price outlook • US Dollar Index Price Today: The dollar index fell by about 0.2% to (102.42) points, from the opening level of today’s trading at (102.61) points, and recorded the highest level at (102.71).
• The index ended Tuesday’s trading down 0.5%, the third consecutive daily loss, due to below-expected data on producer prices in the United States.
• The index recorded on August 5 a seven-month low of 102.16 points, due to the acceleration of the open sell-off of the US currency against a basket of major and minor currencies.
US bond yield: The yield on the ten-year US Treasury bond fell on Wednesday by 0.45 percentage points, extending losses for the fourth consecutive session, which reduces investment opportunities in the US dollar.
Producer prices in the United States In the monthly reading, the US producer price index in total terms recorded a rise of 0.1% in July, worse than market expectations of a rise of 0.2%, worse than the previous reading a rise of 0.2% in June.
The US producer price index in core terms recorded a rise of 0.0% in July, worse than market expectations of a rise of 0.2%, worse than the previous reading of a rise of 0.3% in June.
In annual terms, the US producer price index in total terms recorded a rise of 2.2% in July, below market expectations of a rise of 2.3%, and the March reading was revised upwards from a rise of 2.6% to a rise of 2.7%.
The US producer price index in basic terms recorded a rise of 2.4% in July, below market expectations of a rise of 2.7%, below the previous reading of a rise of 3.0% in June.
Producer prices during the past month are a leading indicator of what the consumer price figures will be during the current month, and the readings above indicate a continued slowdown in consumer prices in August.
US interest rates: Following the above data and according to CME Group’s FeedWatch, the pricing of US interest rate cut prospects increased by about 50 basis points at the September meeting from 49% to 55%, and the pricing of cut prospects fell by about 25 basis points from 51% to 45%.
US consumer price dataIn order to reprice the above contracts, traders await later today the release of key US inflation data for July, which is expected to greatly affect the course of the Federal Reserve’s monetary policy.
By 13:30 GMT, the overall consumer price index is expected to rise by 3.0% annually in July with the same reading previously, and the core consumer price index is expected to rise by 3.2% annually from 3.3% in the previous month.Expectations about the performance of the US dollar • We expect here at FX News Today that if consumer price figures come out less hot than expected, the odds of a US interest rate cut will rise by about 50 basis points in September, which means exacerbating the current losses. in US dollar levels.
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