The U.S. dollar index (DXY) rose by 0.13% today, driven by weakness in stock markets and supportive comments from New York Fed President John Williams regarding persistent inflation. This movement coincided with a wider U.S. trade deficit of $77.6 billion in May, marking a 14-month high and negatively affecting Q2 GDP projections.
In Germany, industrial production in May increased by 0.9%, outperforming expectations of 0.1% and reaching the highest growth in eight months. The euro fell by 0.10% against the dollar despite this positive data, as market expectations for a 25 basis point interest rate hike from the ECB remain low at 4% ahead of their July 23 meeting.
Meanwhile, the Japanese yen gained slightly today as the country’s leading index reached a 4.75-year high, although the yen remained weak overall, trading above 160 per dollar. The risk of government intervention in currency markets persists as Japan’s May household spending declined less than expected, and real cash earnings rose 1.4%, below projections.
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