Producer prices increased 0.4% monthly in November and boosted the US currency.
He global dollar rose on Thursday after a reading of inflation higher than expected, while the euro traded slightly lower after the decision of the European Central Bank to cut interest rates for the fourth time this year.
He dollar index — which measures the performance of the greenback relative to a basket of six other internationally relevant currencies — rose 0.375% to 106.95, a day after a reading of US inflation for November consolidated bets on a cut of fees from the Federal Reserve (Fed) next week.
A report of Department of Labor Thursday showed producer prices rose 0.4% month-on-month in November, compared with estimates of a 0.2% rise according to economists polled by Reuters.
In that sense, the consumer price index (CPI) rose 0.3% last month, in line with forecasts, according to the Bureau of Labor Statistics Department of Labor.
He ECB cut interest rates by 25 basis points on Thursday, leaving the door open for further easing in the future as inflation nears its target and the economy remains weak. He euro fell 0.2% against the dollar and stood at $1.0473.
Markets are now almost fully pricing in a 25 basis point cut at the policy meeting. Fed on Dec. 17 and 18, compared with a probability of about 78% a week ago, the tool showed CME FedWatch.
“Although the Fed is expected to cut its reference rate by a quarter point, the movements of the last 24 hours (by the Bank of Canada, the Swiss National Bank and the European Central Bank) have ensured that the rate differentials between currencies will remain broad relative to the United States, maintaining the position of the dollar in relative terms,” he said Karl Schamotta, chief market strategist at Corpay, in a note.
Source: Ambito
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