US Dollar’s Growth Turned Out to be Short-Lived
The US dollar increased its losses against the yen and reached a new 15-month low on Thursday, while market participants support further short-term weakness in the US currency. Yesterday, the dollar rose after stronger than expected consumer price growth in the US in January, but this profit was short-lived. The US currency fell sharply against its main competitors, despite the change in expectations for the growth of interest rates in the US.
Consumer prices in the US rose more than expected in January, with the core inflation rate marking the largest increase in the year, reinforcing expectations that price pressures will intensify this year and the Fed will accelerate the rate of interest rate growth. This, in turn, will slow the growth of the economy. The Fed forecasts three rate hikes for this year, with the first increase expected in March. Consumer prices (CPI index) in the US rose by 0.5% in January compared to the previous month after an increase of 0.2% in December. In annual terms, prices increased by 2.1% after a similar increase in December.
The Australian dollar receives support from the widespread weakening of the US currency and positive data on the Australian labor market. The unemployment rate in Australia seasonally adjusted, fell to 5.5% in January from 5.6% in December. However, the level remained above the forecast of economists, who expected a decrease in unemployment to 5.3%. The Australian economy added 16.000 jobs last month to 12.453.500.