Dollar index tests four month low before edging up marginally

Published on Jul 18, 2024 12:22

US dollar index continued to linger around its recent lows as markets placed bets on a near term reduction in the interest rates. Following the recent comments from the Fed Chair Jerome Powell, the US dollar index has lost out significantly amid a sustained drop in the treasury yields. Dollar index slumped under 104 mark this week and tested a four month low of 103.50 yesterday. Modest gains emerged in the greenback following retail sales figures. The retail Sales in the US remained virtually unchanged at $704.3 billion in June, the US Census Bureau reported on Tuesday. This followed the 0.3% increase (revised from 0.1%) recorded in May. Retail Sales ex Autos grew 0.4% in the same period. However, total sales for the April 2024 through June 2024 period were up 2.5% from the same period a year ago. This broad strength in the US retail sales, a key economic parameter is capping losses for the dollar index. Dollar was also somewhat supported by falling inflation in the Eurozone yesterday. Eurozone inflation slowed as initially estimated in June. The harmonized index of consumer prices rose 2.5% on a yearly basis, slower than the 2.6% growth posted in May. Dollar index currently quotes around 103.50 amid these cues, up marginally on the day.