Euro clings to parity as traders wait on US inflation - SABC News - Breaking news, special reports, world, business, sport coverage of all South African current events. Africa's news leader.

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The euro hovered a whisker above parity on the dollar on Wednesday ahead of US inflation data, with traders wary a sky-high reading could force it to lows not seen in decades.

Markets are also wary of a surprise from the Reserve Bank of New Zealand, which sets policy at 0200 GMT, with economists expecting a 50 basis point interest rate hike.

Economists forecast headline US inflation accelerated to 8.8% year-on-year in June, a 40-year high, which is likely to reinforce expectations of interest rate hikes in response and help the dollar in a market nervous about both rates and growth. The Japanese yen has taken a beating this year as the Bank of Japan sticks with its ultra-easy monetary policy in contrast with tightening nearly everywhere else.

“Although sterling investors will be hoping for a government less distracted by scandal and more focused on providing coherence around the post-Brexit economy, the jury is still out. “Sterling may suffer a lack of fresh direction until the new PM is in place.”

 

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