Dollar Slumps as Fed Rate Hike Expectations Fade - Capital Street FX
THE U.S. DOLLAR EXPERIENCES A DECLINE TO A ONE-YEAR LOW DUE TO COOLED INFLATION IN THE U.S. The US dollar faced a slump in early European trading on Friday as the Dollar Index fell to a one-year low of 100.515, down by 0.2%, due to expectations of an early end to the Federal Reserve’s rate-tightening cycle. Investors believe that cooler-than-expected inflation data will force the central bank to cut interest rates before the end of the year, resulting in a weaker dollar. The Dollar Index is on track for a weekly decline of more than 1%, which is the steepest since January. This decline followed the release of the March US producer prices index, which fell by 0.5% from the previous month, marking the largest drop since the beginning of the pandemic. The PPI slowed down on an annual basis, rising by 2.7% from a year ago, the smallest gain in more than two years. Excluding the volatile food and energy components, the core PPI fell by 0.1% from February and increased by 3.4% from a y...