LONDON: On Friday, the dollar slipped off a two-week high against the euro, ahead of inflation data that will likely steer the Federal Reserve's policy tightening course, and after the European Central Bank announced that its rate-hiking campaign will begin next month.
Data later in the global day is expected to suggest that core consumer price increases in the United States will slow slightly. Those hoping that decades-high inflation had peaked in March and that the April decline was not a one-off would be reassured by such a result. This might allow the Fed leeway to hike rates more gradually later in the year as it strives to keep inflation under control without sending the economy into recession.
Markets are expecting the Fed to announce the second of three successive 50-basis-point interest rate hikes next week, which has bolstered the dollar in recent months. A Reuters poll of economists found that two-thirds of those polled predicted another 25 basis point boost in September. In Asia, the euro rose 0.23 percent after hitting a low of $1.0611 early in the day, its lowest level since May 23. After a tumultuous ECB-driven day, it lost 0.92 percent against the dollar overnight.
The dollar index, which compares the greenback to six other currencies, fell 0.27 percent to 103.1, but was still up 0.94 percent for the week. That would be the highest percentage gain since April's last week. The index is a set of numbers that represents "With relative ease, he appears to have negotiated a more determined and hawkish ECB. Their proposals to hike rates by 25 basis points in July and September, as well as to consider potentially higher increases, were clearly no more hawkish than predicted "Westpac analysts opined.
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