One of the things supporting the US dollar in recent months has been the expectation that a rate hike from the Federal Reserve is just around the corner. With the rate hike likely being pushed back, and with commodities gaining ground, the US dollar is dropping.
Greenback is mostly lower today against its major counterparts as Forex traders consider that the Federal Reserve rate hike may not be forthcoming as soon as expected. Tepid inflation numbers have many speculating that the Fed will put off raising rates, and that a hike in June is no longer likely.
Commodities are on the rise today, and that is weighing on the dollar as well. Gold and oil are both rebounding today, and the US dollar usually moves inversely to commodities. There isn’t a lot to support the greenback right now, and it appears to be falling back and consolidating a bit. The return to strength might take a little bit of time.
At 10:30 GMT the US dollar index is down to 96.7640 from the open at 96.9860. EUR/USD is higher, gaining to 1.0987 from the open at 1.0946. This is marked improvement from early last week. GBP/USD is down to 1.4937 from the open at 1.4953. USD/JPY is lower, falling to 119.4340 from the open at 119.7290.
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