Forex News: U.S. Dollar Continues To Recover From Recent Weakness

U.S. Dollar Continues To Recover From Recent Weakness

(RTTNews) - Continuing to recovery from recent weakness, the value of the U.S. dollar has moved moderately higher during trading on Friday.

The U.S. dollar index is rising 101.69 points or 0.3 percent to 101.69, climbing further off its worst levels in over a year seen on Tuesday.

Currently, the greenback is trading at 146.13 yen versus the 144.99 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1050 compared to yesterday's $1.1077.

The continued rebound by the dollar comes after the Commerce Department released readings on U.S. consumer price inflation that are said to be preferred by the Federal Reserve.

The Commerce Department report showed consumer prices increased in line with economist estimates in the month of July, while the annual rate of price growth was unexpectedly flat.

While the data has reinforced expectations of an interest rate cut by the Fed next month, traders have expressed uncertainty about the pace of rate cuts.

According to CME Group's FedWatch Tool, there is a 69.5 percent chance of a quarter point rate cut next month and a 30.5 percent chance of a half point rate cut.

Some analysts, such as Harris Financial Group managing partner Jamie Cox, have said there is no justification for a 50 basis point rate cut.

However, ING Chief International Economist James Knightley said, "A soft jobs report [next week] could still tip the odds in favour of a 50bp rate cut."

The Commerce Department also said personal spending climbed by 0.5 percent in July after increasing by 0.3 percent in June, in line with economist estimates.

Excluding price changes, personal spending increased by 0.4 percent in July after rising by 0.3 percent in June.

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