The U.S. dollar is moderately depreciating against major world currencies on Monday morning as investors continue to assess the dynamics of U.S. inflation and the future trajectory of the Federal Reserve’s monetary policy.
Meanwhile, trading volume in the foreign exchange market is lower than usual Monday as U.S. exchanges are closed in observance of Martin Luther King’s Day, Trading Economics noted.
The ICE-calculated index, which shows the U.S. dollar’s performance against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona), is down 0.23%, trading at its lowest in more than seven months.
Last week it was reported that consumer prices (CPI) in the U.S. rose 6.5% in December relative to the same month last year, slowing down from 7.1% in November. Inflation fell to its lowest level since October 2021.
A weakening inflationary pressure in the United States could be the decisive argument for a further slowdown in monetary policy tightening by the Federal Reserve.
The euro/dollar pair is trading at $1.0859 at 7:42 kk against $1.0833 at the close of last Friday’s session, the euro is adding more than 0.2%.
The dollar/yen exchange rate is down 0.1% at 127.71 yen from 127.86 yen at the end of last session.
The pound sterling is up 0.2% to trade at $1.2262 versus $1.2234 at the end of last week.
Meanwhile, the yuan, which is traded in mainland China, is at 6.7007/$1, up from 6.7030/$1 at the close of the previous session.
As it was reported the People’s Bank of China (NBK, the country’s central bank) on Monday injected 779 billion yuan ($116.2 billion) into the financial system within the framework of medium-term lending program (MLF).
Meanwhile, the rate on one-year loans under the MLF was kept at 2.75% per year, the NBK said in a statement. It remains unchanged for the fifth month in a row.
