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Dollar rises before US and Chinese economic data

8 Aug 2023 , 10:07 AM

Tuesday saw a slight increase in the dollar, but it only moved in a small range because investors were reluctant to open new positions before this week’s critical U.S. inflation figure, while attention in Asia shifted to China’s trade data that would be released later in the day.

According to a Reuters poll of experts, China’s exports are predicted to decrease 12.5% from a year earlier in July, following a dip of 12.4% in June. This would be the worst figure since the early days of the pandemic in February 2020.

The trade numbers are released a day before the nation’s inflation reading, and markets are watching for any new indications of deflation in the second-largest economy in the world.

The offshore yuan was trading at 7.2039 per dollar just before the announcement of the data, barely moving.

In early Asia trade, the Australian and New Zealand dollars, which are frequently viewed as liquid proxies for the yuan, were weaker.

Kiwi fell 0.08% to $0.6102, while the Australian dollar fell 0.05% to $0.6571.

The U.S. dollar increased significantly in the broader currency market, rising 0.37% against the Japanese yen to end the day at 142.98.

According to data released on Tuesday, the constant price increases in Japan caused real earnings to decline for the fifteenth consecutive month in June. However, nominal pay growth remained strong despite rising compensation for high-income workers and a growing labour shortage.

The euro slipped 0.1% to $1.0991 and the pound declined 0.12% to $1.2770.

The previous session saw a decline in the euro against the dollar as a result of the news that German industrial production fell more drastically than anticipated in June.

Following a mixed U.S. jobs report on Friday, the dollar index increased by 0.14% to 102.22, moving away from a one-week low. All eyes are now on Thursday’s inflation data, where it is anticipated that core consumer prices will have increased 4.8% on an annual basis in July.

Some will argue that the United States’ growth is currently very strong, which would naturally increase the risk of inflation.

For feedback and suggestions, write to us at editorial@iifl.com

The 10 Strongest Currencies In The World – Forbes Advisor

Related Tags

  • Dollar
  • FOREX
  • Yuan
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