Chinese investors expect a European Central Bank (ECB) policy decision. They will measure further economic improvement from coronavirus and central banks’ possible next steps.
The U.S. Dollar Index that follows the dollar versus a basket of other currencies inched below 0.02% to 90.062 by 11:30 PM ET (3:30 AM GMT).
The USD/JPY pair crept down 0.03% to 109.45. The AUD/USD pair pulled down 0.03% to 0.7738, and the NZD/USD pair dragged below 0.01% to 0.7197.
The USD/CNY pair crawled down 0.07% to 6.3953. We got China’s consumer price index (CPI) for May earlier in the day. It decreased 0.2% month-on-month, and grew 1.3% year-on-year, both under forecasts. Meantime, the producer price index (PPI) created a better-than-expected 9% year-on-year.
Yuan bulls’ recent activity was also damped by the passage of a bill in the U.S. Senate to counter China’s economic and strategic trial.
The GBP/USD pair crept up 0.06% to 1.4163. Nevertheless, the concern is rising that the growing case numbers of the coronavirus Delta variant in the U.K. could prevent the end of lockdown measures. The measures should close on Jun 21.
Investors Still Bet versus Dollar
However, they are concerned regarding whether central banks would start to withdraw their unprecedented stimulus measures.
Also of interest is whether raising interest rates will terminate a 15-month dollar downtrend.
Some investors foretold that higher-than-forecast inflation in the U.S. could assist central banks in starting tapering their asset purchases and give the dollar a lift. Nevertheless, moves were small ahead of the U.S. data, including the CPI, and the ECB policy decision, both scheduled on Thursday.
Markets require reassurance that the global economic improvement isn’t under peril from either dangerous strains of coronavirus or from the Fed having to change tack on stimulus much earlier. So far, the vaccines seem to work distribution is uneven. Nevertheless, it’s still stimulating overall, Societe Generale currency strategist Kit Juckes reported Reuters.
The Bank of Canada will also give down its policy decision later in the day. Nevertheless, other investors concentrated their attention on inflation. This could drag down U.S. yields. Moreover, it could take the dollar with them unless the figure frightened stock markets enough to drive safe-haven flows into the dollar, he continued.