Home Economy Dollar steadies, currency investors seek hawkish central banks

Dollar steadies, currency investors seek hawkish central banks

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The dollar stabilised on Friday and major currency pairs were stuck within recent ranges as markets shrugged off Thursday’s high U.S. inflation number, believing the Federal Reserve’s stance that it is likely to be a temporary blip.

U.S. consumer prices rose 5% year-on-year in May, the biggest jump in nearly 13 years. read more

Currency markets had been sluggish all week in anticipation of the data, but when it came in above expectations, there was little market reaction. The Federal Reserve has repeatedly said that it expects any rise in inflation to be temporary and that it is too soon to be discussing reducing its monetary stimulus.

The dollar index edged lower in the Asian session but picked up later in the day. At 1056 GMT it was up 0.1% on the day at 89.995 . It was on track for a small weekly gain of 0.1%.

“We agree with the Fed that elevated inflation pressures will prove short-lived,” UBS strategists said in a note to clients.

“Both Federal…

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