DXY dollar index rose, with pressure on EUR and GBP

The DXY, which measures the dollar against a basket of strong currencies, rose on Friday, July 1, with the euro and the pound lower, following local indicators. Although the data from the US was mixed, the picture supported the index advance in the first session of the semester and with the possibility of monetary policy tightening by the Federal Reserve (Fed, US central bank).

In the late afternoon in New York, the dollar fell to 135.30 yen, the euro fell to 1.0427 US dollars and the pound fell to 1.2098 US dollars. The DXY index rose 0.43% to 105,138 points, up 0.91% on a weekly basis.

In the Eurozone, the Manufacturing Purchasing Managers’ Index (PMI) fell to 52.1 in June, but was slightly above the preview and expectations, both at 52.0. Eurozone CPI rose 8.6% y/y in June to a record high. For Nordea, the region’s inflationary scenario could prompt the ECB to raise rates further in September, while Commerzbank says the data will pressure the ECB to raise rates by more than 25 basis points as early as July. In the UK, the manufacturing PMI fell to 52.8 in June, the lowest level in two years.

In this context, the euro and the pound sterling were under pressure. The dollar rose even amid mixed US indicators, as the Institute for Supply Management (ISM) Purchasing Managers’ Index fell to 53.0 in June, worse than expected.

Among the Fed’s leaders, Mary Daly (San Francisco) advocated a 75 basis point hike at the meeting later this month, to quickly raise interest rates to a level she considers “neutral.” CME Group has already shown in its monitoring more investors are betting that the USA may raise interest rates lower in the future, while losing economic breath.

Among other measures in focus, the dollar rose to 932.58 Chilean pesos from 916.75 pesos late yesterday afternoon. In Chile, investors have been evaluating the government’s announcement of tax reform, introduced by President Gabriel Borek, with the goal of increasing the Chilean state’s revenue.