Dollar climbs after hot U.S. inflation; euro dips
Shafaq News / The dollar rose to almost 16-month highs against the euro and other currencies on Thursday, after the hottest U.S. inflation reading in 30 years encouraged bets that the Federal Reserve would tighten monetary policy faster than expected.
News on Wednesday that U.S. consumer prices rose last month at the fastest annual pace since 1990 fueled speculation that the U.S. central bank would lift interest rates sooner than expected as traders question its stance that current high inflation is "transitory."
The dollar index looked set for a second straight day of gains, touching a session peak of 95.197, its highest since July 22, 2020. It was last up 0.36% at 95.1630.
The euro was down 0.28% at $1.1446 after hitting $1.1430, the lowest since July 2020.
Second-day inflation-related bets and closure of the U.S. bond market for the Veterans Day holiday likely reduced trading volume and amped up price volatility, said Joseph Trevisani, senior analyst at FXstreet.com, a website following financial markets.
"Generally when the bond market is closed there's less liquidity and you tend to get more exaggerated moves because there's less liquidity to absorb any particular move," he said.
Sterling was down 0.31% at $1.3363 after hitting $1.3359, its lowest since December 2020. Data showing Britain's economy lagging rivals in the July-September period did little to help.
The greenback was last up 0.15% against the Japanese yen , trading in a range of 113.81 yen to 114.15 yen during the day after the U.S. currency rose sharply on Wednesday.
The dollar scored its second straight day of gains against another safe haven, the Swiss franc , last up 0.40% at 0.9217.
Swiss National Bank governing board member Andrea Maechler said at an event late on Thursday the Swiss franc remained in demand as a safe haven investment with market uncertainties elevated due to the ongoing COVID-19 pandemic.
Source:Reuters
