THE US dollar slipped on Friday (Jun 28) after data showed inflation in the world’s largest economy subsided in May, cementing expectations that the Federal Reserve will start cutting interest rates this year.
The dollar initially fell against the yen, the currency pair most sensitive to economic data from the United States because of a high, positive correlation to Treasury yields. The greenback, however, edged higher to trade flat on the day, with investors still focused on the wide interest rate differential between the US and Japan.
The dollar was last up slightly against the Japanese unit at 160.815 yen, after earlier hitting a 38-year high of 161.27 yen. Traders remained on high alert for intervention from the Japanese authorities to boost the currency.
The US currency has posted monthly and quarterly gains versus the yen of about 1.9 per cent and 5.9 per cent, respectively.
