This is what you need to know to operate today Friday, June 27:
He US Dollar (USD) Fight to find demand early on Friday, with the USD index remaining on negative terrain below 97.50 after registering losses for four consecutive days. In the second half of the day, the US Economic Analysis Office (BEA) will publish the data of the Personal Consumer Price Index (PCE), the Federal Reserve’s favorite inflation indicator (FED), for May.
US dollar price this week
The lower table shows the percentage of the US dollar change (USD) compared to the main currencies this week. US dollar was the weakest currency against pound sterling.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -2.20% | -2.42% | -1.56% | -0.83% | -1.83% | -2.01% | -2.23% | |
| EUR | 2.20% | -0.25% | 0.69% | 1.40% | 0.34% | 0.20% | -0.07% | |
| GBP | 2.42% | 0.25% | 0.99% | 1.66% | 0.59% | 0.45% | 0.18% | |
| JPY | 1.56% | -0.69% | -0.99% | 0.72% | -0.30% | -0.40% | -0.76% | |
| CAD | 0.83% | -1.40% | -1.66% | -0.72% | -0.96% | -1.18% | -1.45% | |
| Aud | 1.83% | -0.34% | -0.59% | 0.30% | 0.96% | -0.16% | -0.41% | |
| NZD | 2.01% | -0.20% | -0.45% | 0.40% | 1.18% | 0.16% | -0.27% | |
| CHF | 2.23% | 0.07% | -0.18% | 0.76% | 1.45% | 0.41% | 0.27% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the US dollar of the left column and move along the horizontal line to the Japanese yen, the percentage change shown in the box will represent the USD (base)/JPY (quotation).
The atmosphere of positive market market and mixed macroeconomic data published in the US made the USD continue to weaken in front of its rivals on Thursday. The BEA reported that the US gross domestic product (GDP) contracted at an annual rate of 0.5% in the first quarter, compared to market expectation and the previous estimate of -0.2%. In a positive note, requests for lasting goods increased at a stronger pace than expected in May, while initial weekly unemployment applications decreased to 236,000 from 245,000 in the previous week. Reflecting the optimistic mood, the main Wall Street indices won around 1% on Thursday. In the European session on Friday, the futures of the American stock market rates quote slightly upward.
Japan’s data showed in the Asian session that the Tokyo consumption price index rose 3.1% in annual terms in June, below the 3.4% increase recorded in May. After falling more than 0.5% on Thursday, USD/JPY Fluctuate in a narrow channel around 144.50 on Friday.
USD/CAD It remains in a consolidation phase slightly below 1,3650 after further falling more than 0.6% on Thursday. Statistics Canada will publish monthly GDP data for April later.
EUR/USD It remains firm and listed above 1,1700 in the European morning on Friday. The European Commission will publish business and economic feeling data for June.
GBP/USD It moves laterally in a narrow range below 1,3750 after registering its highest daily closure in more than three years on Thursday.
Gold He failed to benefit from the sales pressure surrounding the USD on Thursday and ended the day with small losses. The Xau/USD extends its weekly fall on Friday and quotes below $ 3,300, losing more than 1% in daily terms.
FAQS inflation
Inflation measures the rise in prices of a representative basket of goods and services. General inflation is often expressed as an intermennsual and interannual percentage variation. The underlying inflation excludes more volatile elements, such as food and fuel, which can fluctuate due to geopolitical and seasonal factors. The underlying inflation is the figure on which economists focus and is the objective level of central banks, which have the mandate of maintaining inflation at a manageable level, usually around 2%.
The consumer price index (CPI) measures the variation in the prices of a basket of goods and services over a period of time. It is usually expressed as an intermennsual and interannual variation. The underlying IPC is the objective of the central banks, since it excludes the volatility of food and fuels. When the underlying IPC exceeds 2%, interest rates usually rise, and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually translates into a stronger currency. The opposite occurs when inflation falls.
Although it may seem contrary to intuition, high inflation in a country highlights the value of its currency and vice versa in the case of lower inflation. This is because the Central Bank will normally raise interest rates to combat the greatest inflation, which attracts more world capital tickets of investors looking for a lucrative place to park their money.
Formerly, gold was the asset that investors resorted to high inflation because it preserved their value, and although investors often continue to buy gold due to their refuge properties in times of extreme agitation in the markets, this is not the case most of the time. This is because when inflation is high, central banks upload interest rates to combat it. Higher interest rates are negative for gold because they increase the opportunity cost to keep gold in front of an asset that earns interest or place money in a cash deposit account. On the contrary, lower inflation tends to be positive for gold, since it reduces interest rates, making bright metal a more viable investment alternative.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
