Reasons for the rise of the US dollar before important inflation data! by Arab Trader


© Reuters Reasons for the rise of the US dollar before the important inflation data!

Arabictrader.com – Achieve dollar The US dollar witnessed a clear increase with the passage of trading today, Monday, especially with the anticipation of the issuance of some economic data, on top of which are inflation data and the US Federal Reserve’s interest rate decisions. The following are the most prominent influences on the dollar’s ​​movements:

Look out for the release of US inflation data tomorrow

The markets are awaiting the issuance of US inflation data tomorrow, Tuesday, in addition to the decisions of the US Federal Reserve on Wednesday, and these data will have a strong impact on the movements of the US dollar this week against other major currencies, especially since the markets are waiting for the Fed to raise interest rates by about 50 points, but the expectations of a rate hike have been strengthened. The interest rate has increased by about 75 basis points recently due to the positive economic data inside the United States recently, and then, if the US inflation data came strongly high, this will enhance the possibilities of raising the US interest rate at a strict pace, which will have a strong impact on the dollar’s ​​trading.

The rise in US bond yields provides significant support for the dollar index

The dollar is still receiving strong support from the rise in the US bond yields of all terms, as the 10-year bond yield rose near the level of 3.580%, up by 0.36%. Also, the yield on 20-year bonds rose by 0.05%, to 3.8073%. At the same time, the yield on 30-year bonds stabilized, recording around 3.560%, up by 0.27%. This rise in bond yields was supportive of the US dollar’s movements against other currencies.

Officials’ statements support the strength of the dollar

In an interview conducted by the US Treasury Secretary with CBS news network yesterday evening, Janet Yellen said that there is a possibility that the US economy will witness a recession next year, but she made it clear that the recession is not necessary or required to reduce the high inflation that the United States is witnessing.

Moreover, Yellen said that she expects a significant decline in the inflation rate in the United States during the year 2023, to reach relatively low levels by the end of the year, unless any unexpected shocks occur, and these statements strengthened the dollar’s performance against other currencies.

How was the American affected by these developments?

In light of these positive economic data in the United States issued today, Monday, and the high demand for the dollar today, the dollar index rose significantly above the level of 105 points, as it is currently trading near the level of 105.09 points, and it awaits any new developments in the markets that may affect its trading.

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