Dollar Edges Up to 3.03 Shekels Ahead of US Inflation Data and Fed Chair Testimony

The US dollar saw a slight increase in the Israeli market, strengthening by 0.1% to trade around 3.03 shekels. The euro also rose by 0.2%, trading above 3.45 shekels. Globally, following yesterday's 0.3% rise in the dollar index, the dollar index remained steady at 101.2 points against major currencies. The euro increased by 0.1% to about 1.14 dollars, and the British pound rose by 0.1% to above 1.33 dollars.

Investors are primarily awaiting the US inflation data scheduled for release at 15:30 local time, alongside the first congressional testimony of Kevin Warsh as Federal Reserve Chair. Warsh will testify before the House Financial Services Committee 90 minutes after the inflation report and will continue his testimony before the Senate Banking Committee the following day.

US forecasts predict a 0.2% monthly decline in the Consumer Price Index for June, mainly due to a sharp drop in oil prices last month. Annual inflation is expected to be 3.8%, down from 4.2% in May but still above the Fed's 2% target. Core inflation, excluding energy and food, is projected to rise by 0.2% monthly and 2.9% annually.

Federal Reserve Governor Christopher Waller stated yesterday that the central bank might need to raise interest rates "in the near term" if upcoming data show inflation remains significantly above the 2% target. Speaking at the New York Association for Business Economics conference, Waller emphasized reliance on inflation data starting with Tuesday's CPI report and warned against complacency if data surprises negatively. He noted the recent trend of persistently high inflation and said any further increase would be taken seriously. While he acknowledged a credible scenario where inflation returns to target without policy tightening, he expressed concern about the possibility of sustained or rising inflation that would require monetary policy tightening soon.