US dollar index drops as America's inflation data comes lower than expected
The US Consumer Price Index (CPI) climbed 0.1 per cent last month, below economists’ expectations for a 0.2 per cent gain, and down from a 0.4 per cent increase in February.
The US dollar declined on Wednesday after data showed consumer prices in America rose less than expected in March, raising expectations that the US Fed is likely to stop hiking rates after a possible increase in May.
The dollar index fell 0.6 per cent on the day to 101.49 and is down from around 102.11 before the data.
The euro reached $1.10005, the highest since February 2, 2023, and was last at $1.09930, up 0.73 per cent on the day.
The dollar dipped to 133.13 Japanese yen, down 0.47 per cent on the day, from around 133.85 before the data.
While the Indian rupee consolidated in a narrow range and settled for the day 1 paise higher at 82.11 against the US dollar on Wednesday.
The US Consumer Price Index (CPI) climbed 0.1 per cent last month, below economists’ expectations for a 0.2 per cent gain, and down from a 0.4 per cent increase in February.
In the 12 months through March, the US CPI increased 5 per cent, the smallest year-on-year gain since May 2021. The CPI rose 6 per cent on a year-on-year basis in February.
Economists at Goldman Sachs said after the data that they no longer expect the Fed to raise rates in June.
Fed funds futures traders are pricing in 71 per cent probability that the Fed will raise rates by an additional 25 basis points at its May 2-3 meeting, down from around 76 per cent before the data.
Minutes from the Fed's March meeting released on Wednesday also showed that several Fed officials considered pausing interest rate increases until it was clear the failure of two regional banks would not cause wider financial stress, but even they ultimately concluded high inflation remained the priority.
Retail sales data on Friday will be analysed next for how consumer spending is being affected by higher prices.
With Reuters Inputs
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
5 midcap stocks for up to 44% return? Brokerages have 'buy' ratings on these 5 stocks; check out their targets
Gold and Silver rate today (May 21, 2024): Precious metal futures trade lower; yellow metal futures below Rs 73,750, white metal futures slips over 1%
IRFC Q4 dividend: Indian Railway Finance Corporation announces dividend alongwith Q4 earnings; check details
303% Rise in 1 Year: Multibagger PSU stock in focus after Maharatna reports weak fourth-quarter results
06:35 AM IST