FOREX-Dollar drops to three-week lows after inflation data

  • Reuters
  • Forex News
FOREX-Dollar drops to three-week lows after inflation data
Credit: © Reuters.

* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E (Adds quote, context, updates prices; changes dateline, previous LONDON, byline)

By Karen Brettell

NEW YORK, April 13 (Reuters) - The U.S. dollar fell to three-week lows on Tuesday after data showed inflation making strong gains in March, though the rise was not expected to alter the Federal Reserve's commitment to keeping interest rates at rock-bottom levels for years to come.

The consumer price index jumped 0.6% last month, the largest gain since August 2012, after rising 0.4% in February, the Labor Department said on Tuesday. Excluding the volatile food and energy components, the CPI rose 0.3%. The so-called core CPI nudged up 0.1% in February. dollar briefly spiked on the data, before reversing course and dipping to three-week lows. Treasury yields also fell after the data. US/

"It keeps unchanged the outlook of the Fed to stay the low rate course over the foreseeable future," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington D.C. "We're likely to see inflation move higher, before it eventually moves lower. So far the economy is sticking to the Fed's script."

Inflation is expected to show extra bullish comparisons to last year in the coming months due to a drop in price pressures in 2020 when businesses closed due to the spread of COVID-19.

The U.S. central bank has said that it will look through temporary increases in inflation and analysts expect it will allow inflation to run hotter than previously expected before raising rates.

The next major U.S. economic release will be retail sales data for March on Thursday.

The dollar index =USD fell as low as 91.93, the lowest level since March 23. The euro EUR=EBS gained 0.24% to $1.1940. The greenback fell 0.22% to 109.16 Japanese yen JPY=D3 .

The Australian dollar AUD=D3 , which is a proxy for global risk appetite, was little changed on the day at $0.7623.

The New Zealand dollar NZD=D3 gained 0.20% to $0.7042. The country's central bank is expected on Wednesday to leave interest rates and its quantitative easing program unchanged. BTC=BTSP hit a record $63,275, extending its 2021 rally to new heights a day before the listing of Coinbase shares in the United States. bid prices at 9:38AM (1338 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Dollar index

=USD

91.9200

92.0910

-0.16%

2.155%

+92.3400

+91.9370 Euro/Dollar

EUR=EBS

$1.1940

$1.1912

+0.24%

-2.28%

+$1.1940

+$1.1878 Dollar/Yen

JPY=D3

109.1600

109.4250

-0.22%

+5.71%

+109.7450 +109.1250 Euro/Yen

EURJPY=

130.33

130.26

+0.05%

+2.69%

+130.4900 +129.8100 Dollar/Swiss

CHF=EBS

0.9208

0.9222

-0.13%

+4.10%

+0.9259

+0.9209 Sterling/Dollar GBP=D3

$1.3738

$1.3747

-0.05%

+0.56%

+$1.3768

+$1.3697 Dollar/Canadian CAD=D3

1.2560

1.2564

-0.03%

-1.36%

+1.2628

+1.2530 Aussie/Dollar

AUD=D3

$0.7623

$0.7623

+0.02%

-0.88%

+$0.7630

+$0.7585 Euro/Swiss

EURCHF=

1.0995

1.0986

+0.08%

+1.75%

+1.1013

+1.0985 Euro/Sterling

EURGBP=

0.8689

0.8669

+0.23%

-2.76%

+0.8712

+0.8641 NZ

NZD=D3

$0.7042

$0.7028

+0.20%

-1.94%

+$0.7043

+$0.7005 Dollar/Dollar

Dollar/Norway

NOK=D3

8.5095

8.4800

+0.48%

-0.77%

+8.5660

+8.4865 Euro/Norway

EURNOK=

10.1621

10.1037

+0.58%

-2.91%

+10.1855

+10.0976 Dollar/Sweden

SEK=

8.5404

8.5606

-0.07%

+4.20%

+8.5964

+8.5421 Euro/Sweden

EURSEK=

10.1979

10.2050

-0.07%

+1.21%

+10.2188

+10.1811

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