Dollar Drops After Fed Eases US Inflationary Tension

The US dollar fell against other major currencies on Friday, May 14th as risk appetite recovered in various markets, after Fed officials this week helped ease tension over the acceleration of inflation in the United States.

The dollar, which is considered a safe haven in times of market volatility, fell by a third of a percentage point against a basket of currencies, erasing some of its earlier gains it made on Wednesday after data showed a sudden rise in consumer prices.

Fed officials played down expectations of tightening policy, asserting that the price hike on the back of the reopening of the economy would be temporary.

US consumer prices rose in April at the fastest pace in nearly 12 years on the back of a boom in demand.

Other US data will be released later in the day, including retail sales and industrial production, which are likely to give more indications about the extent of the economic recovery.

The euro was among the winning currencies against the dollar today, as it rose 0.4% to $1.21265.

The British pound is heading to record a profit of more than 0.5% on a weekly basis, supported by bets on a strong economic recovery in Britain and expectations that there will be no referendum on the independence of Scotland.

As for cryptocurrencies, Bitcoin is heading to record its worst weekly performance since February, as it is trading near the $ 50,000 level, after Tesla President Elon Musk said this week that he would stop accepting payments in cryptocurrency for its cars due to environmental concerns.