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Dollar Mixed Ahead Of Inflation Report

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The dollar is turning in a mixed performance against its major rivals Tuesday afternoon, but remains little changed overall. Traders are looking ahead to the release of the consumer price index Wednesday morning, as well as the minutes from the most recent meeting of the Federal Reserve Wednesday afternoon.

Things were relatively quiet on the U.S. economic front this morning. Producer prices in the U.S. increased by more than expected in the month of March, according to a report released by the Labor Department on Tuesday. The Labor Department said its producer price index rose by 0.3 percent in March after edging up by 0.2 percent in February. Economists had expected producer prices to inch up by 0.1 percent.

European Central Bank Governing Council member Ewald Nowotny said that the central bank's asset purchase program would exit this year, taking a step closer to normalizing policy.

In an interview with Reuters, Nowotny called the ECB to get on with the process of policy normalization, in order to ensure that it can take a gradual approach and begin with a hike in the deposit rate.

"I would have no problem with moving from -0.4 percent to -0.2 percent as a first step and then, as a second step, include the (main refinancing) policy rate," he stated.

The dollar has fallen to over a 1-week low of $1.2350 against the Euro Tuesday afternoon, from an early high of $1.2302.

France's industrial production recovered in February, figures from the statistical office Insee showed Tuesday. Industrial production grew 1.2 percent month-on-month in February, in contrast to a 1.8 percent fall in January. This was the fastest growth in four months but slower than the expected increase of 1.4 percent.

The buck has dropped to a 2-week low of $1.4180 against the pound sterling this afternoon, from an early high of $1.4119.

Like-for-like sales in the United Kingdom surged 1.4 percent on year in March, the British Retail Consortium said on Tuesday. That topped expectations for a decline of 0.1 percent following the 0.6 percent increase in February.

The greenback has risen to around Y107.200 against the Japanese Yen this afternoon, from a low of Y106.614 this morning.

by RTTNews Staff Writer

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