Dollar tends to decline amid increasing bets on Fed stopping rate hikes

On Wednesday, the dollar hovered near a three-week low against the euro and near a one-month low against the British pound, after lower-than-expected inflation data cemented the view that the Federal Reserve will refrain from raising interest rates this time when it makes its decision. later in the day.

The Chinese yuan fell to its lowest level in six and a half months, a day after the central bank cut interest rates, amid speculation of more stimulus to support the faltering economic recovery after the pandemic.

The dollar index, which measures the currency’s performance against a basket of six rival currencies, including the euro and sterling, settled at 103.30 in Asian trading, after falling overnight to its lowest level since May 22 at 103.04.

The consumer price index in the United States increased only 0.1% last month and recorded the lowest rise on an annual basis since March 2021, which is 4%, which suggested the possibility of the US central bank stopping raising interest rates.

The euro was little changed and recorded 1.07885 after reaching a high of $1.08235 on Tuesday. The European Central Bank will make its monetary policy decision on Thursday amid widespread expectations of a quarter-point hike in interest rates.

The British pound also settled largely at $ 1.2607, after rising 0.8 percent in the previous session, to reach its highest level since May 11, at $ 1.2625.

The dollar fell 0.09 percent against the Japanese yen, recording 140.11. It rose to the highest level since June 5th on Tuesday, recording 140.31, despite lower-than-expected inflation data in the United States, with expectations that the Japanese central bank will maintain its stance on following ultra-loose monetary policies on Friday.

The Australian dollar rose to $0.6772 after reaching the highest level since May 10 on Tuesday at $0.6807.

The yuan earlier touched 7.1785 against the dollar in foreign trading for the first time since November 29, but it witnessed little change in mid-day trading and recorded 7.1707.