Dollar advances near 7-month peak after US inflation data

By Chibuike Oguh

NEW YORK (Reuters) – The U.S. dollar advanced near a seven-month high against major currencies on Wednesday after data showed U.S. inflation for October increased in line with expectations, suggesting the Federal Reserve will keep cutting rates.

The greenback has risen to its highest level since April 16, buoyed by Donald Trump’s victory in last week’s U.S. presidential election, which sparked expectations of potentially inflationary tariffs and other measures by his incoming administration.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,rose 0.33% to 106.34 after reaching as high as 106.50.

Labor Department data on Wednesday showed the U.S. consumer price index rose 0.2% for the fourth straight month, in line with economists’ expectations, amid higher costs for shelter such as rents. In the 12 months through October, the CPI advanced 2.6%.

U.S. Treasury yields fell following the inflation data, with the benchmark U.S. 10-year note yield dropping 2.3 basis points to 4.41%.

“So certainly there was a lot of concern going into the number as it’s just one of the new bricks in this kind of wall of worry; so there’s a little bit of a relief rally and yields are lower,” said Marvin Loh, senior global market strategist at State Street (NYSE:STT) in Boston.

“It just shows how on edge the market is based on the Fed, based on inflation, and certainly based on this nebulous Trump trade. The dollar seems to be one of the cleanest, easiest ways of playing the Trump trade as well as bitcoin, it seems.”

Bitcoin surged past the $90,000 level for the first time, powered by euphoria from Trump’s election victory and expectations that his administration will be beneficial to cryptocurrencies. Bitcoin gained 3.63% to $91,519.00. Ethereum rose 0.46% to $3,295.60.

Japan’s wholesale inflation accelerated in October at the fastest annual pace in more than a year, complicating the Bank of Japan’s decision on how soon to raise interest rates.

The yen broke through 155 per dollar, the Japanese currency’s weakest level since late July. It was last at 155.01 yen per dollar.

The euro continued its descent amid expectations of potential Trump tariffs. The euro (EUR=EBS) was down 0.43% at $1.0577.

The dollar weakened 0.02% to 7.241 versus the offshore Chinese yuan.

“The euro is having to deal with the outsized impact they’re going to have to deal with from a Trump administration and the uncertainty as to where China fits into the new world order to a certain degree,” Loh added.

This post is originally published on INVESTING.

  • Related Posts

    COP29 host urges collaboration as deal negotiations enter final stage

    By Valerie Volcovici and Nailia Bagirova BAKU (Reuters) – COP29 climate summit host Azerbaijan urged participating countries to bridge their differences and come up with a finance deal on Friday,…

    Gold prices rise, set for strong weekly gains on Russia-Ukraine jitters

    Investing.com– Gold prices rose in Asian trade on Friday and were headed for a strong weekly gain as increased tensions between Russia and Ukraine sparked a broad rush into traditional…

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    CMC Markets Wrote Off £2.8M Investment in Blockchain Firm Strike X

    • November 22, 2024
    CMC Markets Wrote Off £2.8M Investment in Blockchain Firm Strike X

    COP29 host urges collaboration as deal negotiations enter final stage

    • November 22, 2024
    COP29 host urges collaboration as deal negotiations enter final stage

    Forex Takes Trump’s Statements Too Seriously. Forecast as of 22.11.2024

    • November 22, 2024
    Forex Takes Trump’s Statements Too Seriously. Forecast as of 22.11.2024

    Short-term Analysis for Oil, Gold, and EURUSD for 22.11.2024

    • November 22, 2024
    Short-term Analysis for Oil, Gold, and EURUSD for 22.11.2024

    Short-term Analysis for BTCUSD, XRPUSD, and ETHUSD for 22.11.2024

    • November 22, 2024
    Short-term Analysis for BTCUSD, XRPUSD, and ETHUSD for 22.11.2024

    Gold prices rise, set for strong weekly gains on Russia-Ukraine jitters

    • November 22, 2024
    Gold prices rise, set for strong weekly gains on Russia-Ukraine jitters