On Thursday, the U.S. dollar dropped lower, the EURO gained slightly, and the Japanese yen rose to multi-month peaks before next week’s Bank of Japan meeting.
The U.S. dollar index, which measures its strength against 6 other major currencies, dropped 0.2% to 103.950, extending its overnight decline.
On Thursday, the US dollar retreated and extended its overnight fall amid increasing confidence that the Fed will implement an interest rate cut in September.
The second quarter’s gross domestic product data is due later today and is anticipated to show 2.0% annualized growth.
Although this would be higher than the 1.4% growth of the first quarter, it would still be much slower than the 4.2% rate seen in the second half of 2023.
The release is also expected to show inflation last quarter slowed considerably, with the GDP price index dropping from 3.1% to 2.6%, before Friday’s PCE price index data, the Federal Reserve’s preferred measure of inflation.
The Fed will meet next week and is generally expected to keep interest rates unchanged while indicating a rate cut will be coming in September.
EUR/USD was 0.1% higher at 1.0847, and the EURO is inching up despite German business morale in July falling unexpectedly, the third straight decline in Germany’s most prominent leading indicator.
