US Dollar Strengthens Slightly As Investors Wait For Clarity On Inflation

Illustration. (Photo: Doc. Antara)

JAKARTA - The US dollar strengthened slightly against a basket of other major currencies in late trading Tuesday (Wednesday 9 June EST), with market volatility hitting its lowest level in more than a year, as investors awaited clearer signals about inflation rates and central bank policy in the world.

As reported by Antara, with inflation updates expected from China, Europe, and the United States this week and the upcoming meeting of the European Central Bank on Thursday, June 10 followed by a meeting of the US Federal Reserve next week, currency investors appear to be failing to make headway, while the S&P 500 is slightly down.

The currency market moves up and down between highs and lows meaning a decrease in volatility. The Deutsche Bank Currency Volatility Index hit its lowest level since February 2020.

"All major currencies are having an unsettled reaction right now as they wait," said JB Mackenzie, managing director of futures and FX at TD Ameritrade.

"We are waiting for the inflation rate to see how the economy plays out. Are they very hot and, if so, does that mean there will be a reaction from central banks globally?"

Traders on Tuesday, June 8 sent long-term US Treasury bond yields to their lowest in more than a month after a report showed small business owners lacked confidence, and narrowed the spread on the closely watched portion of the yield curve.

The dollar index, which measures the greenback against a basket of six major rivals, was up 0.14 percent at 90.0731. While the euro fell 0.09 percent against the greenback to 1.2179 US dollars.

The British pound weakened 0.15 percent to $1.4155 and the Australian dollar slipped 0.21 percent to $0.7739, with both stuck in the ranges seen over the past few months.

Cryptocurrencies were more volatile on Tuesday 8 June with Bitcoin last down 3.0 percent at $32,544 after hitting a session low of $31,025 - also its lowest level since May 19. Ether was down 7.0 percent at $2,464.47.