The dollar weakened before US inflation, weighed by the strength of the pound

The DXY Index, which measures dollar divergence against six pairs, fell on Monday 12th, although hovering around stability, on the eve of the March Consumer Price Index (CPI) release in the US. The greenback began the session higher, but the breathing was short. Despite the advance of Treasury bond interest today, a move that favored the currency recently, what prevailed was the strength of the pound amid the re-opening of the UK economy.

Near the close in New York, the dollar fell to 109.43 yen, the euro rose to $ 1.1909, and the pound rose to $ 1.3743. DXY, in turn, scored a 0.03% loss to 92.138 points.

“The dollar is under pressure as a busy week for the United States begins,” analysts at Brown Brothers Harriman, a US investment bank, wrote earlier in the day. In addition to inflation, consumer confidence data and the balance sheet season will also drive the markets in the coming days. Nevertheless, BBH estimates indicate that the dollar should resume rally, as expectations are that US macroeconomic indicators are showing a “strong” economic recovery.

Average estimates of the analysts he consulted Broadcast forecast It indicates a 0.5% increase in the US CPI in March, in the monthly comparison. Compared to the same month last year, inflation is expected to increase by 2.5%. Analysts say, however, that this is mainly due to statistical factors. In March of last year, when the epidemic began to accelerate, the United States issued a decision to close, causing prices to plummet. “In order for the dollar to emerge from its relative recession, it will help if the data is consistent with the start of growth in the economy,” says Joe Manembo, chief market analyst at Western Union.

Recently, rising inflation expectations have led part of the market to expect monetary tightening by the Federal Reserve (the Federal Reserve, and the US Central Bank) later this year. This pricing increased long-term interest rates and strengthened the dollar. However, in an interview today, St. Louis Fed Chairman James Bullard said that it is too early to talk about changes in monetary policy.

As the dollar stopped breathing, the pound rose. The British currency has benefited from the progress of the UK’s economic re-opening, as the COVID-19 vaccination accelerates. Today, British restaurants, bars, gyms and beauty salons have reopened. The President of the Bank of England (BoE), Silvana Tenryu, defended the accommodative monetary policy and said that she saw temporary factors in the recent rise in inflation.

Regarding commodity-related emerging country currencies, the dollar fell to 77,347 Russian rubles and 20,573 Mexican pesos, close to New York’s closing time, but rose to 926,007 Argentine pesos.