Dollar Falling On Trump And Bullard Comments
The dollar is losing ground against its major rivals Friday afternoon. On a quiet day on the economic front, the buck has been swayed by some cautionary comments regarding future Fed rate hikes.
St. Louis Fed President James Bullard remarked that the central bank should delay further rate hikes amid yield curve inversion.
«Imminent yield curve inversion in the U.S. has become a real possibility,» Bullard said in a speech in Glasgow, Kentucky.
«Yield curve inversion is a naturally bearish signal for the economy. This deserves market and policymaker attention.»
President Trump also suggested the Federal Reserve's plan to gradually raise interest rates could hurt recent economic progress, claiming the rate hikes penalize the U.S. for doing well.
«The United States should not be penalized because we are doing so well,» Trump tweeted. «Tightening now hurts all that we have done.»
He added, «The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates — Really?»
The dollar has dropped to around $1.1725 against the Euro Friday afternoon, from an early high of $1.1626.
The euro area current account surplus declined notably in May, the European Central Bank reported Friday. The current account surplus fell to a seasonally adjusted EUR 22.44 billion from EUR 29.55 billion in April. This was the lowest since March 2015, when it totaled EUR 19.46 billion.
The euro area government deficit continued to narrow in the first quarter as revenue increased amid a fall in expenditure, figures published by Eurostat showed Friday. The general government deficit to GDP fell to 0.1 percent from 0.6 percent in the fourth quarter.
Germany's producer prices climbed at the fastest pace in nine months in June, Destatis reported Friday. Producer prices grew 3 percent year-on-year in June, faster than the 2.7 percent increase logged in May. The annual rate matched economists' expectations and was the fastest since September 2017.
The buck has fallen to around $1.3135 against the pound sterling this afternoon, from an early high of $1.2994.
The UK budget deficit narrowed in June on higher revenue and lower expenditure and public borrowing for the quarter ended June reached its lowest level since 2007, the Office for National Statistics reported Friday.
Public sector net borrowing, excluding public sector banks, dropped by GBP 0.8 billion to GBP 5.4 billion. This was the lowest June net borrowing since 2016. Nonetheless, PSNB was bigger than the expected GBP 5 billion.
The greenback reached an early high of Y112.622 against the Japanese Yen Friday morning, but has since retreated to around Y111.425.
Consumer prices in Japan were up 0.7 percent on year in June, the Ministry of Internal Affairs and Communications said on Friday. That was unchanged from the May reading, although it was shy of expectations for 0.8 percent.
Japan's all industry activity grew only marginally in May after recovering in April, data from the Ministry of Economy, Trade and Industry showed Friday. The all industry activity index gained 0.1 percent on month, much slower than April's 1 percent rebound. Nonetheless, the monthly rate was better than the expected nil growth.