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The dollar will rise after U.S. consumer prices have risen almost in line with November’s expectations, as investors who were prepared for much higher inflation bet that actual numbers would not change the pace of interest rate hikes. I lost some ground on Friday.
Labor Ministry data showed that the consumer price index (CPI) has risen as the cost of goods and services has risen significantly within the supply constraints for the largest annual profits since 1982.
The consumer price index rose 0.8% last month after rising 0.9% in October, but rose 6.8% in the 12 months to November, following a 6.2% rise in October. This is compared to the 0.7% forecast by economists polled by Reuters.
Greg Anderson, Global Head of Forex Strategy at BMO Capital Markets, said:
“The FX market has been a very long US dollar for several months, so this number has moderated and there are few events that could significantly raise the dollar by the end of the year,” he said. Powell’s later speech is probably the last dollar-catalyzed event of the year.
“Usually, Forex investors are shrinking their positions towards the end of the year … Today’s procedural action, when the dollar fell on neutral news, is probably a precursor to that,” Anderson said.
Against the rival basket, the dollar entered the negative territory after the news and regained enough ground to turn positive, but it was still below the previous CPI level. The index was 96.233, up 0.04 percent.
Sterling showed some upside against the dollar the day before comparing the profit of $ 1.3210, which fell 0.09% in the last transaction.
The euro fell 0.04% to $ 1.1289, and the Chinese yuan fell in the onshore and offshore markets.
By Sinéad Carew
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