US Inflation Data Causes USD To Pull Tremendously Against EUR, JPY Edges Higher

The trading price of the US dollar has witnessed a major pull in its value against the euro in the Thursday trading session.

USD Trades at 8-Month Low

The report shows that the trading value of the dollar has hit a nine-month low against the trading price of the euro. To be exact, the price of the dollar has fallen close to that particular level.

The reason behind the pull in the trading price of the dollar is the inflation recently revealed by the US Feds. The data shared by the US Feds for inflation shows that it has been easing.

This suggests that the Feds will decide to lower the interest rate hike rates with the inflation rates going down.

For a long time, it has been speculated by the Feds that the inflation rates are constantly weakening. They have kept predicting that the Feds may soon lower their aggression toward the interest rate hikes.

Now it seems that the Feds may actually decide to do it and the aggression may get relaxed against the interest rate hikes.

With the inflation rates easing, the Feds may finally decide that it is safe to lower the interest rates.

The Japanese Yen Moved Upward

The value of the dollar dipped just as the Japanese yen recorded a surge in value. The data shows that the Japanese yen has performed really well against the dollar in the latest forex trades.

The yen managed to experience a great surge and moved to a six-month high against the trading price of the greenback.

This happened as speculations started to come in pertaining to the Bank of Japan (BOJ). It is speculated that the BOJ may not lower the interest rates and may continue with its policy.

The government of Japan was of the view that the interest rates could be lowered. However, the inflation rates in the country are telling a different story.

Therefore, it has become necessary for the BOJ to continue with its monetary policy and stick with hiking the interest rates with aggression.

Compared to the greenback, the yen has a higher tendency of growing stronger in near future. Therefore, the investors are supporting the Japanese fiat over the American currency.

Thus, the value of the dollar keeps declining while the price of the yen keeps on moving in the stronger territory against the greenback.

US CPI

The US Feds recently shared the consumer price index (CPI) data where they revealed that it had dropped by 0.1% in December.

After the data was shared there was joy among the consumers that the interest rates would be lowered by the Feds.

The traders also speculated that the dollar price would lower but it is not so much good news for the USD traders.

The very realization that the trading price of the dollar is to weaken, caused fear and forced them to retreat from supporting the greenback.

The analysts have shared their findings on the matter claiming that inflation rates have been declining for the past three months. They have dropped so much that a trend has been formed.

As a result, the Feds will eventually loosen the grip over the interest rate hikes. It is highly likely that the interest rates may be pulled lower by the Feds starting in February of 2023.

If the predictions turn out to be true, then the situation would turn quite promising for the consumers. However, the value of the dollar will start losing its strength in the forex market.

Dollar’s Price Dip

The data shows that the value of the dollar has dipped by 0.83% against the euro. The dollar value has dipped against the sterling as well, recording a 0.56% dip in the latest trading session.

Against the Japanese yen, the value of the yen has dipped by 0.815% against the dollar.