Dollar Strengthens On Improving U.S. Consumer Price Inflation
January 18 2017 - 3:35AM
RTTF2
The U.S. dollar climbed against its major rivals in the European
session on Wednesday, after data showed that the nation's consumer
price inflation improved in December, backing hopes for Fed rate
hikes this year.
Data from the Labor Department showed that U.S. consumer prices
increased in line with economist estimates in the month of
December.
The Labor Department said its consumer price index rose by 0.3
percent in December after edging up by 0.2 percent in November.
Excluding food and energy prices, the core consumer price index
crept up by 0.2 percent for the second consecutive month. The
uptick in core prices also matched economist estimates.
Investors await the NAHB housing market index for January due at
10:00 am ET and the Federal Reserve's Beige Book report later in
the day for more clues about the health of the economy.
Minneapolis Federal Reserve Bank President Kashkari is set to
speak at Minneapolis Urban League at 10:00 am ET, while Federal
Reserve Chair Janet Yellen will speak in San Francisco at 3:00 pm
ET.
The currency has been trading in a positive territory in the
Asian session.
The greenback bounced off to 1.0046 against the Swiss franc,
from a low of 1.0011 hit at 5:45 pm ET. The greenback is likely to
challenge resistance around the 1.03 zone.
The greenback, having fallen to 112.57 against the yen at 5:00
pm ET, reversed direction and was trading higher at 113.45.
Continuation of the greenback's uptrend may see it challenging
resistance around the 115.00 area.
The greenback reversed from an early session's low of 1.2417
against the pound and was trading up at 1.2283. The next possible
resistance for the greenback is seen around the 1.21 mark.
Data from the Office for National Statistics showed that the
U.K. unemployment rate remained stable in three months to November
and people claiming unemployment benefits declined
unexpectedly.
The unemployment rate came in at 4.8 percent, the lowest since
September 2005 and matched economists' expectations.
The greenback edged up to 1.0655 against the euro, following a
decline to 1.0715 at 5:00 pm ET. The greenback is seen finding
resistance around the 1.05 region.
Final data from Eurostat showed that Eurozone inflation climbed
as initially estimated in December.
Inflation rose to 1.1 percent in December from 0.6 percent in
November.
The greenback bounced off to 1.3121 against the loonie, 0.7543
against the aussie and 0.7180 against the kiwi, from its early lows
of 1.3038, 0.7567 and 0.7216, respectively. If the greenback
extends rise, 1.33, 0.74 and 0.70 are likely seen as its next
resistance levels against the loonie, the aussie and the kiwi,
respectively.
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