Dollar Falls After Soft U.S. Consumer Inflation Data
October 13 2017 - 5:24AM
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The U.S. dollar declined against its major counterparts in the
European session on Friday, as the nation's consumer prices grew
slightly less than expected in September.
The Labor Department said its consumer price index climbed by
0.5 percent in September after rising by 0.4 percent in August.
Economists had expected prices to increase by 0.6 percent.
Excluding food and energy prices, core consumer prices inched up
by 0.1 percent in September after edging up by 0.2 percent in
August. Core prices had been expected to rise by another 0.2
percent.
The U.S. treasury yields fell after the data, with the benchmark
yield on the 10-year note falling 2.29 percent, while that of
2-year equivalent was down by 1.51 percent. Yields move inversely
to bond prices.
Meanwhile, data from the Commerce Department showed that U.S.
retail sales rose significantly in the month of September.
The Commerce Department said retail sales surged up by 1.6
percent in September after edging down by a revised 0.1 percent in
August.
Economists had expected retail sales to spike by 1.7 percent
compared to the 0.2 percent drop originally reported for the
previous month.
The University of Michigan is scheduled to release its
preliminary report on consumer sentiment in October at 10:00 am ET.
The consumer sentiment index is expected to edge down to 95.0.
The currency fell against its major rivals in the Asian session,
with the exception of the pound.
Reversing from an early 2-day high of 1.1805 against the euro,
the greenback weakened to 1.1867.If the greenback falls further,
1.20 is possibly seen as its next support level.
Final data from Destatis showed that Germany's inflation held
steady, as initially estimated, in September.
Consumer prices advanced 1.8 percent year-on-year in September,
the same rate as seen in August. The rate also matched the estimate
published on September 28. The greenback slid to 111.74 against the
Japanese yen, a level unseen since September 26. The next possible
support for the greenback-yen pair is seen around the 110.5
mark.
Data the Bank of Japan showed that Japan's M2 money stock rose
4.1 percent on year in September, coming in at 979.3 trillion
yen.
That beat forecasts for an increase of 4.0 percent, which would
have been unchanged from the August reading.
The greenback edged down to 0.9720 against the Swiss franc, off
early 3-day high of 0.9771. The greenback is seen finding support
around the 0.96 area.
Data from the Federal Statistical Office showed that
Switzerland's producer and import prices climbed more than expected
in September.
Producer and import prices advanced 0.8 percent year-on-year in
September, faster than the expected growth of 0.6 percent.
The greenback hovered at a 11-day low of 1.3324 against the
pound, compared to 1.3259 hit late New York Thursday. On the
downside, 1.35 is likely seen as the next support for the
greenback.
The greenback dropped to a 9-day low of 0.7183 against the kiwi
and more than 2-week low of 0.7886 against the aussie, off its
early highs of 0.7121 and 0.7818, respectively. Continuation of the
greenback's downtrend may see it challenging support around 0.73
against the kiwi and 0.80 against the aussie.
The greenback, having advanced to a 2-day high of 1.2511 against
the loonie at 8:15 am ET, reversed direction and fell to 1.2454.
The next possible support for the greenback is seen around the 1.23
mark.
Looking ahead, U.S. business inventories for August and
University of Michigan's preliminary consumer sentiment index for
October are set for release shortly.
At 10:25 am ET, Federal Reserve Bank of Chicago President
Charles Evans speak about the economy and monetary policy at the
Wisconsin Summit on Financial Literacy.
At 11:30 am ET, Federal Reserve Bank of Dallas President Robert
Kaplan speaks about the economy and monetary policy at the
Chartered Financial Analyst Institute, in Boston.
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