Sun, Aug 13, 2017 - Page 14 News List

US dollar falls after consumer price data miss expectations

Reuters, NEW YORK

The US dollar fell against a basket of currencies on Friday, after data showed US consumer prices rose less than expected last month, pointing to benign inflation that could make the US Federal Reserve cautious about raising interest rates again this year.

The US consumer price index (CPI) edged up 0.1 percent last month after being unchanged in June. Economists polled by Reuters had expected the CPI to rise 0.2 percent last month.

“Taken in combination with yesterday’s weaker-than-forecast producer price report, it is clear there is no need for imminent policy tightening,” said Karl Schamotta, director of global product and market strategy at Cambridge Global Payments in Toronto.

The US dollar index, which tracks the greenback against six major currencies, fell 0.37 percent to 93.052, down 0.8 percent for the week.

“If the data continues to come in on the softer side, the market might start to price the Fed staying on hold this year,” said Sireen Harajli, foreign-exchange strategist at Mizuho in New York.

In Taipei, the New Taiwan dollar fell against the US dollar, losing NT$0.049 to close at NT$30.358, down 0.5 percent from last week’s NT$30.220.

The US dollar fell to a 16-week low against the Japanese yen, but pared some losses after Russian Minister of Foreign Affairs Sergei Lavrov said there was a Russian-Chinese plan to defuse tensions between the US and North Korea.

The US dollar on Friday closed at ¥109.18, down 1.4 percent for the week.

The US dollar was 0.11 percent lower against the Swiss franc on Friday, and was down 1.1 percent for the week.

The Swiss franc and the yen are often sought in times of geopolitical tension. Both have logged big gains against the US dollar this week amid escalating tensions between North Korea and the US.

The euro was up 0.45 percent at US$1.1823 after Morgan Stanley raised its forecasts for the currency, predicting it would hit US$1.25 early next year. The common currency gained 0.4 percent against the US dollar this week.

The British pound, which touched a three-week low against the greenback earlier in the session, recovered ground to trade 0.32 percent higher. The pound lost 0.2 percent against the US dollar this week.

The weaker US dollar boosted the Canadian dollar, helping it pull back from a four-week low.

Additional reporting by CNA, with staff writer

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