The US dollar retreated versus its most-traded peers today as market participants were waiting for Wednesday’s important economic reports from the United States, including inflation data. Information about growth of consumer prices can affect the pace of monetary tightening by the Federal Reserve.
Analysts predicted that tomorrow’s data will show an increase of the Consumer Price Index by 0.3% in January, up from 0.1% in December. Yet the core CPI is expected to rise by 0.2%, which is slower than 0.3% registered in the month prior.
Also released on Wednesday, retail sales are expected to show growth by 0.2% last month, slowing from 0.4% in the month before. But the core components of the indicator should rise by 0.5%, accelerating from December’s 0.4%.
The Bloomberg Dollar Spot Index dropped by almost 0.6% to the lowest level in more than a week. That helped to boost US stocks, which were down during the European trading session, but rebounded during the American session.
EUR/USD rallied from 1.2291 to 1.2354 as of 21:12 GMT today. GBP/USD gained from 1.3835 to 1.3888. USD/JPY crashed from 108.64 to 107.81 but bounced from its daily low of 107.40.
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