U.S. dollar

The US dollar rose slightly during the first sessions of the week, while continuing to move in a limited range, approaching the closing levels of the last sessions of last week, in conjunction with the markets’ anticipation of the release of US inflation data.

In terms of dollar trading today, the US dollar index, which measures the performance of the US currency once morest other major currencies, recorded a marginal increase of regarding 0.03% to settle near the level of 103.66 points, following the dollar achieved weekly gains for the second time in a row at the end of the previous session.

The most important factors affecting dollar trading today are as follows:

1. Positive recent US data

The dollar received some support from the release of data on the preliminary reading of US consumer confidence and inflation expectations issued in the last sessions of last week; Whereas, the preliminary reading of the Consumer Confidence Index issued by the University of Michigan was positive for the third month in a row, and it recorded 66.4 points during this February, which exceeds market expectations by recording regarding 65.0 points.

Urgent – Positive preliminary reading of US consumer confidence and inflation expectations

The preliminary reading of inflation expectations issued by the University of Michigan for the same period recorded the equivalent of 4.2%, which is higher than the previous reading of the index during last January, which was estimated at only 3.9%, and that data reinforced market expectations regarding the US Federal Reserve continuing its tightening approach for a longer period, which positively affected the dollar trades.

2. The dollar is awaiting US inflation data

The markets are awaiting the release of US consumer price index data tomorrow, Tuesday, which implies the possibility of predicting the US Federal Reserve’s next steps towards raising interest rates, and their significant impact on the movements of the US dollar in this week’s trading. If the data showed that US inflation exceeded market expectations, this may be reflected positively on the dollar; Given the possibility that the US Federal Reserve will raise interest rates at a greater pace to curb high inflation, which will eventually lead to an increase in demand for the dollar.

On the other hand, the dollar’s trading faced some pressure due to the escalation of concerns regarding the issue of the US debt ceiling, which may result in the US defaulting on its debts.

In this regard, Patrick Harker, a member of the US Federal Reserve in Philadelphia, warned of the grave repercussions that may result from the US defaulting on its debts, in the event that an effective solution to the debt ceiling issue is not reached, other than the usual method, indicating the need to take an effective course to manage the issue. In order to avoid the possible budget deficit, and this matter affected to some extent the dollar’s trading.

Member of the US Federal Reserve: The method used to solve the debt ceiling issue must be changed