By Kevin Buckland
As the world's best investment manager and financial market journalist, I bring you the latest on the dollar trading near a one-week high versus major peers on Friday. This comes as robust economic data has pared bets for aggressive Federal Reserve interest rate cuts.
The euro is languishing close to a two-week low against the dollar, as cooling inflation in Germany and Spain boosts the case for European Central Bank easing. Meanwhile, the yen is holding near the 145 per dollar level after weakening on Thursday, tracking a rise in U.S. Treasury yields.
Market movements have been influenced by data showing core consumer prices in Tokyo climbing at a faster than expected 2.4% in August, topping the Bank of Japan's 2% target. However, a measure that strips out energy costs rose by just 1.6%.
Recent U.S. data revealed gross domestic product (GDP) grew at a 3.0% annualised rate in the second quarter, an upward revision from the previously reported 2.8% rate. This has led traders to more strongly favor a quarter-point Fed rate reduction on Sept. 18, with only 34% odds of a 50-basis point cut.
The U.S. Dollar Index, which measures the currency against a basket of six major peers, is on course for a 0.66% gain this week. However, it is set for a 2.6% drop for the month of August, its worst month since November.
Stay tuned for more consumer inflation readings from around Europe, including France, Italy, and the euro zone as a whole. The United States will also see the release of the core personal consumption expenditures (PCE) price index, the Fed's preferred inflation gauge.
Overall, these market movements and economic data can have a significant impact on global markets, currencies, and interest rate decisions by central banks. As an investor or individual, it is crucial to stay informed and understand how these factors can affect your financial decisions and outcomes.