The US dollar rose to its level in 15 weeks against the Japanese yen on Tuesday following the release of June inflation figures indicating an increase in price pressures.This development is seen as strengthening the belief that the Federal Reserve will continue to exercise caution, in implementing rate cuts.
Month saw a 0· 5 % increase in the Consumer Price Index. The most significant rise since January. Pushing the annual rate to 2 · 6 %. Core inflation also ticked up slightly to 2 · 8 % indicating that tariffs might be starting to affect consumer prices but its not at a point where it would prompt immediate changes, in Fed policy.
The dollar strengthened by 0..66 percent, against the yen to 148..68 which marks its level since April.. Meanwhile.. The euro declined by 0..27 percent to $rdollar_sign$.163rdollar_sign$ and sterling also decreased to its point since the end of June..
The recent tariff updates by Trump aimed at U.S trading allies starting August 1 have mostly been overlooked by the market participants as they await further indications of increased tensions before reassessing the risk factors as, per analysts views.
Speculation persists regarding the future of Fed Chair Jerome Powell amidst escalating criticism from Trump and confirmation by Treasury Secretary Scott Bessent of a search, for a replacement candidate; however Powell has shown no intention to step down and emphasizes the importance of Feds autonomy.
The market is currently anticipating that the Federal Reserve will make its interest rate reduction in September and has already factored in approximately a 50 basis point decrease, for 2025.
