U.S. Dollar Weakens On Tillerson's Firing, Inflation Data
March 13 2018 - 5:10AM
RTTF2
The U.S. dollar slipped against its major opponents in the
European session on Tuesday, as U.S. consumer inflation grew in
line with economist estimates in February, adding to hopes that the
Fed is likely to proceed with gradual interest rate hikes this
year.
Data from the Labor Department showed that the consumer price
index rose by 0.2 percent in February after climbing by 0.5 percent
in January. Economists had expected consumer prices to rise by 0.2
percent.
Core consumer prices, which exclude food and energy prices, also
edged up by 0.2 percent in February following a 0.3 percent
increase in January. The uptick in core prices also matched
expectations.
The annualized rate of core inflation was up only 1.8%, once
again short of the Federal Reserve's 2% target.
The data supported hopes that the Fed is likely to hike interest
rates gradually.
News that the U.S. President Donald Trump has fired Secretary of
State Rex Tillerson dampened investor sentiment.
Trump announced on Twitter that he would replace Tillerson with
Mike Pompeo, the director of the Central Intelligence Agency
(CIA).
The greenback traded mixed against its major rivals in the Asian
session. While it rose against the yen and the pound, it held
steady against the franc and the euro.
The greenback declined to a 2-week low of 1.3965 against the
pound, after having advanced to 1.3875 at 5:15 am ET. The next
support for the greenback is likely seen around the 1.43 level.
Reversing from an early high of 1.2315 against the euro, the
greenback slipped to a 5-day low of 1.2386. The greenback is seen
finding support around the 1.26 region.
The greenback fell to a 5-day low of 0.9438 against the franc,
from a high of 0.9494 hit at 4:00 am ET. On the downside, 0.93 is
seen as the next support level for the greenback.
The greenback slipped to a new 2-week low of 0.7894 against the
aussie and near a 3-week low of 0.7348 against the kiwi, off its
early highs of 0.7859 and 0.7290, respectively. If the greenback
falls further, 0.81 and 0.75 are likely seen as its next support
levels against the aussie and the kiwi, respectively.
Following a 4-day high of 1.2877 hit at 8:15 am ET, the
greenback reversed direction and edged down to 1.2831 against
loonie. The greenback is poised to find support around the 1.27
level.
The greenback retreated to 106.71 against the yen, from near a
2-week high of 107.29 hit at 8:30 am ET. This may be compared to a
4-day low of 106.25 set early in the Asian session. The greenback
is seen finding support around the 104.00 level.
Data from the Bank of Japan showed that Japan producer prices
were flat on month in February. That was shy of expectations for an
increase of 0.2 percent and down from 0.3 percent in January.
Looking ahead, at 10:15 am ET, the Bank of Canada Governor
Stephen Poloz delivers a speech titled "Today's Labour Market and
the Future of Work" at Queen's University in Ontario.
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