USD recovers, euro inches up after inflation data

The dollar rose against the Japanese yen on Tuesday, recovering some of its losses from Monday’s sell-off, despite market expectations that Japan could raise interest rates in December. The euro also edged higher after data showed eurozone inflation picked up only slightly.

The dollar rose 0.2% against the Japanese yen to 155.845, after hitting a two-week low on Monday, following a sell-off in 10-year Japanese government bonds.

The greenback was under pressure late in the session when US President Donald Trump said there was a potential candidate for the position of Federal Reserve Chairman when he introduced White House economic adviser Kevin Hassett at a White House meeting, according to Reuters .

Earlier the same day, President Trump also said he would announce Mr. Jerome Powell's successor early next year.

Investors see Mr. Hassett as a “moderate” choice to replace Mr. Powell, and his nomination could put pressure on the USD.

Stocks, bonds, cryptocurrencies and the dollar all plunged on Monday after Bank of Japan Governor Kazuo Ueda said the central bank would consider the “pros and cons” of raising interest rates at its next policy meeting. The comments pushed the yield on two-year Japanese government bonds above 1% for the first time since 2008 and rippled through global bond markets.

Data released on Monday showed US manufacturing activity was weaker than forecast, adding pressure on the Fed to cut interest rates this month.

According to CME's FedWatch tool, the market sees an 87% chance of the Fed cutting rates by 25 basis points at its December 10 meeting, up from 63% a month ago.

The euro rose 0.1 percent to $1.1624 after data showed inflation in the 20 countries that use the common currency rose to 2.2 percent in November from 2.1 percent in October - a slight increase that is unlikely to put pressure on the European Central Bank (ECB).

Inflation is close to the ECB's 2% target, according to comments published on Tuesday by ECB Council member Joachim Nagel.

Number This material appears at the right time. There are suggestions that the ECB could continue continue to cut interest rates, even though their easing cycle is likely to end, Mr. Joshua Mahony, expert at Scope Markets, commented.

The pound was flat at $1.3211, after hitting a one-month peak on Monday.

The Bank of England reduces the requirement on capital for banks to boost lending and support the economy - the first reduction since the financial crisis.

Quang Trung

Source: https://baoninhbinh.org.vn/usd-hoi-phuc-euro-nhich-len-sau-so-lieu-lam-phat-251203060503648.html