Dollar down to a one-month low

Published: 19 Jun at 5 AM Tags: Euro, Dollar,

Uncertainty over whether the Federal Reserve will increase interest rates before the end of the year has pushed the US dollar to new one-month lows. Core inflation measures during May rose by just 0.1 per cent, the lowest they have been in five months.

The dollar is down 0.3 per cent this week and is trading at 123.080 yen after previously dipping as low as 122.475 yen. In Asia all eyes are on a policy meeting at the Bank of Japan, although analysts are not expecting any radical moves from the central bank as it is unlikely to expand on its stimulus programme.

Although inflation data from the US was unimpressive, other economic figures released this week suggest the US is picking up steam. Claims for unemployment benefits are down and factory activity is improving.

The euro has gained nearly 1 per cent this week and is trading firmer at $1.1373. However, the strength of the single currency is more a reflection of a weak dollar as there is still a great deal of uncertainty over Greece’s debt crisis.

Sterling has also been given a boost by the weakened US currency and is trading at $1.5930, the highest it has been in seven months.