In mid-morning trading in Sydney, the U.S. Dollar dropped slightly ahead of today’s release of the U.S. Consumer Price Index data for May. According to experts, the Consumer Price Index data will confirm foreign exchange traders’ view that interest rates will be hiked by the Federal Reserve before the year end.
This weekend’s meeting of the Group of 8 Finance Ministers in Osaka, Japan is likely to support strong U.S. Dollar because of the recent strong dollar policy comments made by Ben Bernake, Chairman of the Federal Reserve System. Analysts believe that the G8 Finance ministers will support a strong U.S. dollar.
On June 13, 2008 at 01:15 GMT, the U.S. Dollar traded at 107.83 Yen, compared to 107.90 Yen, while the Euro traded at $1.5444, compared to $1.5435 in late trading in New York.
Experts are predicting that the CPI data will show 0.5% month-on-month rise but 0.2% rise, with the exclusion of food and energy. Such a prediction, according to experts, confirms the Federal Reserve Bank’s resolve to curb inflation now that it’s comfortable with the economic outlook, however, it is expected that the Fed will only hike interest rates if the economic recovery in the second half turns out to be more solid than expected.
The Euro moved higher above the $1.5400 mark, and it’s expected that it’s poised to move higher again.