Last week’s release of inflation data helped to push the US Dollar Index higher and lifted the greenback to an 8-year peak versus the Japanese Yen. Though it was reported by the US Department of Labor Statistics that CPI fell to 0.1% in April, core CPI, which excludes volatile components such as fuel and food, maintained the 1.8% rate despite predictions of a decline. Nonetheless, analysts are still divided as to whether the overall first quarter economic figures are convincingly positive enough to dispel thoughts of a stalled recovery.
As reported at 9:05 am (BDT) in London, the USD/JPY pair was trading at a session high of 122.8850 Yen before falling back slightly to 122.6600 Yen, still a gain of 0.92%. The EUR/USD, meanwhile, is lower at $1.0906, falling from a session high of $1.0983l.
The Euro is likely to remain under some pressure as nervous jitters resume over Greece’s economic future and its future in the Euro area. The US Dollar Index which FX traders use as a gauge to assess the Dollar’s relative weight was trading at 96.9720 .DXY, a gain of 1%.
US Data Looms
Also last Friday, the head of the US Federal Reserve Bank, Janet Yellen, reiterated that the central bank would continue on with a tighter monetary policy until such time as the economic data supports an interest rate increase. Markets will watch for today’s US economic releases which will include durable goods figures, consumer confidence, flash PMI and various housing data inputs to help gauge the Fed’s likely next move.