Dollar Up, Commodity Currencies Restrict Gains
The dollar gains in early European trade Tuesday, however, gains were completed by the strength of commodity currencies on the back of rises in the prices of oil and base metals.
The U.S. Dollar Index traces the greenback against a basket of other currencies crawled down 0.06% to 90.237 by 11:53
The USD/JPY pair slightly up 0.10% to 108.89.
The AUD/USD pair slightly up 0.03% to 0.7833 ahead of Australia’s federal budget, due to be handed down later in the day.
The NZD/USD pair trimmed down 0.14% to 0.7264.
The USD/CNY pair inched up 0.18% to 6.4270.
China’s CPI just dropped expectations, contracting 0.3% monthly but rose 0.9%Yearly. The PPI increased a 6.8% year-on-year.
The GBP/USD pair edged down 0.01% to 1.4118.
Investors are looking forward to inflation data from the U.S., including core CPI, that will be released on Wednesday. The data will measure the level of inflationary pressure and could accelerate Treasury yields up, possibly it could give the greenback a lift.
Prices for commodities including crude oil, copper, and steel are expected to rise further, increasing concerns about runaway inflation.
The dollar was trading at $1.2097 against its Canadian counterpart.
the greenback’s weakest level in more than three years. It was also near a two-week low against the Mexican peso.
Demand for commodities is anticipated to grow continuously because the improved COVID-19 vaccinations could lead to a growing economic viewpoint in more countries.