Equity markets recovery continued to press on the US dollar ahead of the release of US inflation data later in the day as the dollar index continued to decline for the third day in a row. The US dollar hit a 15-month low against the Japanese yen, with the Euro also continuing its gains against the dollar for the fourth day.
Strong growth data from the German economy today underlined the strength of the Eurozone economy. German GDP grew by 2.3% on a yearly basis in the last quarter of 2017, prompting the Euro to maintain gains against the USD and is currently trading at 1.2360 levels, also achieving the price target we mentioned yesterday at 1.2375.
Markets are looking ahead to US inflation data, which is expected to slow in January. If the data comes in positive, some support will be provided to the dollar. Markets have moved to the dollar recently amidst market turmoil despite it falling to a 3-year low against a basket of currencies.
As the Japanese stock market continued to decline, the yen rose nearly 1% to its highest level since November 2016 against the US dollar, with USDJPY currently trading at 107.50 levels.
The New Zealand dollar rose strongly against the US dollar by 0.5% to reach its highest level throughout the week at 0.7334, following the rise of business managers' expectations for inflation in the next two years to be 2.1% in the survey issued by the Reserve Bank of New Zealand.
