Dollar unable to recover more at the moment due to uncertainty surrounding the debt issue – Commerzbank

FXStreet Insights Team FXStreet

On the inflation front, progress is slow. Antje Praefcke, FX Analyst at Commerzbank, believes that the debt ceiling issue is dampening the Dollar at the moment.

Caution about rapid rate cuts in the US

“On a MoM comparison the inflation for both rates remained stubbornly at 0.4%. That means that price pressure in the US is falling, but only very, very slowly. In the face of an inflation rate falling this slowly, and remaining well above the inflation target, the Fed would probably not consider cutting its key rate again in the autumn.”

“I think inflation will have to weaken considerably more before the Fed considers first rate cuts. The Dollar is unable to recover more at the moment due to the uncertainty surrounding the debt issue.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD rebounds toward 1.3250, markets assess UK PM Starmer resignation

GBP/USD regains its traction and rises toward 1.3250 in the European session on Monday following a drop below 1.3200 with the immediate reaction to UK PM Keir Starmer's resignation announcement.

EUR/USD holds near 1.1450 amid concerns over Iran deal progress

EUR/USD struggles to stage a rebound and fluctuates at around 1.1450 on Monday. Concerns about progress for the US-Iran peace deal and expectations of higher US interest rates keep the US Dollar supported against the Euro. ECB President Lagarde is set to speak later on Monday.

Gold rises above $4,200 as tensions ease in Middle East

Gold stays in positive territory above $4,200 on Monday, looking to snap a three-day losing streak. News of US and Iran making progress in the latest round of talks seems to be helping the precious metal hold its ground at the beginning of the week.

Breaking: Iran closes the Strait of Hormuz amid ceasefire deal violation

Iran says it is closing the Strait of Hormuz after accusing the United States (US) and Israel of violating the ceasefire. According to Iran, the decision came over the continued Israeli strikes in Lebanon. The Iranian Revolutionary Guard Corps Navy issued a warning to all vessels: "Do not approach the Strait of Hormuz; otherwise, your security will be jeopardized."

Canada CPI Preview: Inflation expected to tick higher in May, pressuring BoC outlook

The publication of Canada’s May Consumer Price Index figures on Monday will be the focus of attention. Indeed, Statistics Canada data will provide markets with an update on price pressures following its June 10 meeting, where policymakers kept the interest rate steady at 2.25%, matching the broad consensus.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.