Investing.com – The dollar rallied Thursday morning in Asia but remained near a five-month low as the focus remains on US inflation data and the European Central Bank (ECB) decision to be released later in the day.
The US dollar index, which tracks the dollar against a basket of other currencies, rose 0.07% to 12:13 am ET 90.183 ET (4:13 GMT).
USD / JPY fell 0.05% to 109.56.
AUD / USD climbed 0.05% to hit 0.7733 while NZD / USD climbed 0.06% to hit 0.7183.
The USD / CNY pair fell 0.01% to 6.3856. Governor of the People’s Bank of China Yi Gang predicted at the Lujiazui Forum in Shanghai that consumer inflation in 2021 will remain below 2%, below the government’s official target of about 3%.
He added that the economy is operating within reasonable limits, close to the potential level of production, and prices are generally acceptable.
GBP / USD fell 0.04% to hit 1.4112.
The move remained modest as investors continued to take a wait and see approach, which also removed some market volatility.
The US inflation data, including the May CPI, is highly anticipated after a report from the previous month said consumer prices rose in April by the largest difference in 12 years.
As Investing.com prepares predictions for a 0.4% rise in prices, it can now be bet that the higher price will last longer than expected. It also casts doubt on the recent announcement by the US Federal Reserve that inflationary pressures are temporary.
Although the dollar remained locked in a tight range ahead of the data release, the yield on 10-year US Treasuries fell over the past week, falling from 1.6350% last Friday to 1.874% earlier in the Asian session.
“It appears that the balance of risks is biased upward in the US CPI versus consensus, which will contribute to a sell-off in Treasury bonds and thus higher yields and therefore a stronger dollar … said the head of Pepperstone Research Chris Weston said in the note.
As for the central bank, investors will be on the lookout for any signs that the ECB will begin to cut back on asset purchases in its policy decision. While many expect the central bank to maintain the status quo in its policies, any sign of contraction could affect the euro’s movement.
The single currency rose to a weekly high of $ 1.2218 on Wednesday, after which it remained virtually unchanged and remained near the $ 1.2178 mark by the opening of the Asian session.
Investors are also awaiting the Fed’s policy decision next week.
In the cryptocurrency space, Bitcoin has retained profit from its largest rally in four months. It last traded at $ 37,097.02 after jumping nearly 12% on Wednesday.
The dollar rose, but approached a five-month low on the eve of US inflation data
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