U.S. Dollar Weaker Despite Strong U.S. Inflation Data
April 13 2021 - 5:16AM
RTTF2
The U.S. dollar was lower against its major counterparts during
European deals on Tuesday, despite the release of a data showing
better than expected U.S. consumer prices in the month of
March.
Data from the Labor Department showed that U.S. consumer price
index beat forecasts in March.
The consumer price index climbed 0.6 percent in March after
rising by 0.4 percent in February. Economists had forecast an
increase of 0.5 percent.
Excluding food and energy prices, core consumer prices rose 0.3
percent in March following an increase of 0.1 percent in the
previous month. Economists had expected core prices to rise by 0.2
percent.
Boston Federal Reserve Bank President Eric Rosengren said on
Monday that the economy is likely to grow rapidly this year,
although the labour market recovery could take longer.
Policy makers "can be more patient and wait for more tangible
signs that inflation has increased, rather than just forecasts,
before starting to raise rates," he added.
The dollar rose in the Asian session, as U.S. bond yields
climbed following better demand at auctions of three- and 10-year
notes on Monday.
The greenback dropped to 1.1939 against the euro, which was its
lowest level since March 23, from a high of 1.1877 seen at 8:30 am
ET. The pair was worth 1.1910 when it closed deals on Monday. The
greenback may locate support around the 1.21 level.
Data from Destatis showed that German wholesale price rose for a
second straight month and at the fastest pace in four years in
March, largely led by higher prices for petroleum products.
The wholesale price index rose 4.4 percent year-on-year, which
was the fastest pace since March 2017, when they increased 4.8
percent.
The greenback remained lower against the yen, at a 5-day low of
109.13. The pair had closed Monday's deals at 109.37. If the
greenback extends decline, 105 is possibly seen as its next support
level.
The greenback declined to the weakest level since March 4
against the franc, at 0.9209. At yesterday's trading close, the
pair was quoted at 0.9222. On the downside, 0.88 is possibly seen
as its next support level.
The greenback pulled back to 1.2560 against the loonie, 0.7044
against the kiwi and 0.7628 against the aussie, after rising to a
6-day high of 1.2630, 5-day high of 0.7004 and near a 2-week high
of 0.7585, respectively in prior deals. The next possible support
for the greenback is seen around 1.23 against the loonie, 0.72
against the kiwi and 0.78 against the aussie.
The greenback was trading at 1.3754 against the pound, slightly
easing off from a high of 1.3694 hit at 9:00 am ET. The
pound-greenback pair had ended yesterday's trading session at
1.3736. The greenback is seen finding support around the 1.41
region.
Data from the Office for National Statistics showed that the UK
economy expanded in February but at a slower than expected
pace.
Gross domestic product grew 0.4 percent, following a revised 2.2
percent fall in January. But this was slower than the expected
growth of 0.6 percent.
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