U.S. dollar takes a plunge following disappointing data
The U.S. dollar slumped to four-month low as the producer prices record shows a slow-moving US growth, highlighting that the Federal Reserve might not raise interest rates soon.
The greenback decreased for three consecutive days after the producer prices fell by 0.4% in April.
This newly economic data release has further complicated the Federal Reserve’s efforts to raise benchmark rates.
In fact, the dollar slumped against the euro following ECB President, Mario Draghi’s speech as he affirmed that the quantitative monetary easily shall be fully implemented.
According to Robert Sinche, a strategist in Stamford, Conneticut, there has been a retracement in the currency‘s trend as the US has not received consistent data to support the strong data.
Investors are still confident about a quick recover of the U.S. dollar against the euro.
The 19-nation currency has been greatly supported by an increase of 0.4% in the gross domestic product data, the strongest record since 2013.
A decline in U.S job claims was accentuated by another drop in producer prices, giving a clear indication that inflation may remain below the Fed’s 2% target.
It has also been noted that the U.S jobless claims decreased by 1,000 during the last week, its lowest level since April 2000.
The Royal Bank of Canada in London anticipates an interest rate increase in September, however remains optimistic as the latest data collected showed real weaknesses.