Euro jumps more than two percent against the dollar, inflation in the US economy eases

(Patria) - On world markets, the euro's exchange rate against the dollar jumped more than 2 percent last week, to its highest level in 16 months, as inflation in the US eases, leading investors to expect that the US Federal Reserve will soon end its cycle of interest rate hikes.

The dollar index, which shows the movement of the US dollar's value against the other six most important world currencies, fell 2.3 percent last week, to 99.96 points, near its lowest level in 15 months.

The dollar's exchange rate against the European currency fell by 2.4 percent, bringing the euro's price to $1.1227, and at one point to $1.1245, its highest level in 16 months. The dollar's price also fell against the Japanese currency, by 2.4 percent, to 138.80 yen.

The dollar came under pressure after a series of data showing that inflation in the US is easing.

Among other things, it was announced last week that consumer prices in June rose by 0.2 percent compared to the previous month, while on an annual basis they rose by 3 percent, the lowest since the beginning of 2021.

It was also announced that producer prices in June rose by only 0.1 percent on an annual basis, which is their mildest increase since mid-2020. All these are better data than analysts expected, so they have strengthened investors' belief that the US central bank will soon end its cycle of interest rate hikes, which has been ongoing for more than a year.