The US Dollar Index (DXY) has declined to about 103.70, while the ten-year US Treasury rates have dropped to 4.16%. The Japanese Yen also showed a positive outlook, as the recent fundamental outlook indicated a possibility of reversal of the trend.
Fed's Possible Movement With Rate Decisions
The expected Fed rate cut in September is supported by indications of development in lowering inflation and cooling labor conditions. June's recent consumer inflation figures showed a faster-than-expected slowing of price pressures. For once in more than four years, the monthly headline inflation dropped. The Unemployment Rate also went to 4.1%.
Officials of the Fed are increasingly confident that inflation will reach the 2% objective. At Monday's Economic Club of Washington, Fed Chair Jerome Powell observed that fresh inflation data has bolstered the conviction that inflation is on route to reaching the targeted rate of 2%. Nevertheless, he underlined that legislators need more confidence before considering rate reductions.
JPY Bulls Are Active From Upbeat Trade Balance
Driven by a more-than-expected drop in imports, which offset a minor dip in export numbers, Japan's Trade Balance for the year ended in June jumped to a surplus of ¥224 billion.
Japan's year-over-year exports in June increased by 5.4%, which fell short of the expected 6.4% and greatly dropped from the 13.5% gain of the last period. Though export growth slowed, imports fell to 3.2%, much below the expected 9.3% and the past 9.5%.
Looking closer, Japan's exports to the EU fell significantly by 13.4%, not offset by an 11.0% year-over-year rise in exports to the US.
