After a week of anxious waiting, markets got the high U.S. inflation number they dreaded, then shrugged it off and moved on - leaving the U.S. dollar under pressure and most majors stuck in ranges.
Early in the Asia session the greenback nursed small losses,
as traders figured there were enough one-offs in last month's
0.6% rise in consumer prices to support the Federal Reserve's
insistence that inflation was likely to be transitory.
The dollar bought 109.44 yen and was headed for a
small weekly loss. It was also on track for modest weekly losses
on the Aussie dollar and British pound, last trading at $0.7752
per Aussie and $1.41825 per pound.
A dovish commitment from the European Central Bank to stick
with its elevated tempo of bond buying held the euro
in check at $1.2189.
The U.S. dollar index fell slightly after the inflation figures were published and last sat at 89.974, down very slightly for the week.
Benchmark 10-year U.S. Treasuries actually rallied to a
three-month high in the wake of CPI, as short sellers quit bets
on rising yields.
The 10-year yield was last at 1.4434% after dipping to a
three-month low of 1.4320% earlier Friday. It was as high as
1.6350% a week earlier.
Focus now turns to the Fed's meeting next week, although
traders now say that there may not be much of a shift in
rhetoric which has played down the need to taper stimulus.
A plan for reducing bond buying is expected to be announced
in August or September a Reuters poll of economists found, but
it isn't forecast to begin until next year.
Cryptocurrencies looked to close out the week on a stronger
footing, with bitcoin seemingly well supported above $35,000 despite more talk of global regulatory scrutiny.
The digital token last traded at $37,163.52 and on track for
a 3.5% weekly advance.
Reference: Reuters
Thai
Eng