The dollar rose Friday, July 21, as data indicated the strength of the US labor market, which may prompt the US Federal Reserve to keep interest rates high for a longer period, while the yen strengthened after the acceleration of core consumer price inflation in Japan again in June.<\/p>\n\n\n\n
Next week, central bank meetings will be held in Europe, Japan and the United States, while investors analyze the data in order to better predict monetary policy paths.<\/p>\n\n\n\n
The yen rose 0.08% to 139.97 per dollar after Japan’s core consumer price index rose 3.3% in June from a year earlier, in line with median market expectations, but still above the Bank of Japan’s 2% target.<\/p>\n\n\n\n
The data reinforces the chances of the Bank of Japan revising its inflation forecast for this year, by raising new expectations next week.<\/p>\n\n\n\n
The yen has fallen about 1 percent against the dollar this week and is on track to halt two weeks of gains.<\/p>\n\n\n\n
Meanwhile, data showed that the number of Americans filing new applications for unemployment benefits fell unexpectedly last week, touching a two-month low, indicating continued labor market strength.<\/p>\n\n\n\n
Markets expect the US central bank to raise interest rates by 25 basis points next week, and the odds of it continuing to hike increased after the data.<\/p>\n\n\n\n
Against a basket of currencies, the dollar rose 0.03% to 100.78. The index is on track to achieve a gain of 1% during the week.<\/p>\n\n\n\n
The euro rose 0.04% to $1.1132, after falling 0.6% on Thursday. The European Central Bank is expected to raise interest rates by 25 basis points on July 27, according to the views of all economists polled by Reuters.<\/p>\n\n\n\n
The Australian dollar fell 0.28% to $0.676, and the New Zealand dollar fell 0.34% to $0.621.<\/p>\n