DXY down slightly amid positive data releases

Key Movers

European Central Bank President Christine Lagarde spoke earlier today with a generally hawkish tone, “It is unlikely that in the near future, the central bank will be able to state with full confidence that the peak rates have been reached.” Lagarde implied in her comments that she expects more rate hikes for the Eurozone.

Australia is set to release Consumer Price Index (CPI) data tonight. This data is expected to be lower after the Reserve Bank of Australia recently hiked interest rates to an 11-year high.

India’s current account deficit is shrinking to $1.3 billion from $16.8 billion last quarter. This correction is largely due to robust service exports. A shrinking deficit implies that foreign countries are purchasing more from India, a sign of economic recovery.

The Canadian dollar has dipped against most major pairs as inflation slows in Canada. CPI data released today shows year-over-year inflation rose 3.4% in May, representing the smallest yearly increase in inflation since June 2021. As CPI data is usually a strong indicator of where the country’s central bank will take interest rates, this lower inflation release may indicate a possible slowing of rate hikes. The largest contributor to the rise in CPI was mortgage costs, which are a result of higher interest rates. Excluding this figure, inflation is only up 2.5% in May, a telling sign that Canadians are feeling the impacts of higher interest rates.