The U.S. dollar is getting cheaper against the euro, the yen and the pound sterling in trading on Monday.
The ICE-calculated index showing the dollar’s dynamics against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona) lost 0.12% in trading, while the broader WSJ Dollar Index lost 0.21%.
The euro/dollar pair is trading at $1.0606, up from $1.0587 at the close of the previous session. The pound rose to $1.2175 versus $1.2141 at the close of trading on Friday.
Traders continue to follow the statements of the representatives of the Federal Reserve System (FRS) and wait for the next statistical data on the American economy.
This week, the U.S. Commerce Department will release final data on the country’s GDP dynamics in the third quarter. Experts polled by Trading Economics do not expect to revise their estimate of GDP growth from the previously announced 2.9%.
Federal Reserve Bank of New York (FRB) President John Williams told Bloomberg on Friday that the U.S. central bank will raise rates as high as necessary to bring “stubbornly high” inflation under control.
According to Williams, for the Fed’s actions to be successful, the rate will have to exceed the U.S. inflation rate at some point. At the same time, he noted that he does not expect it to rise to 6% (the October rate of growth of the PCE consumer price index), but rather expects inflation to slow down.
Mary Daley, president of the San Francisco Fed, still believes that the Fed is a long way from meeting the goal of substantially lowering the rate of inflation in the U.S.
“We still have a long way to go,” Daley said at an American Enterprise Institute event Friday. – We’re a long way from our goal of achieving price stability.”
The yen rose Monday on a Kyodo report that the Japanese government and the country’s central bank may revise its approach to the inflation target, making it more flexible. Japanese authorities are currently aiming for a 2% inflation target “as soon as possible.”
A more flexible wording of the inflation target would pave the way for the Japanese central bank to tighten monetary policy, Bloomberg notes.
Kyodo report, however, was refuted by Japan’s Cabinet Secretary General Hirukazu Matsuno, who said there are no plans to change the government’s approach to inflation target. According to Matsuno, he hopes that the Bank of Japan will continue its policy moving toward the inflation target.
The Bank of Japan will hold a two-day meeting Dec. 19-20 to decide on key parameters of its policy in the near future.
The dollar-yen exchange rate fell to 136.09 yen from 136.7 yen at market close on Friday.
