Slowdown In U.S. Consumer Inflation Pulls Down Dollar

dollar 080219 10nov22 lt

The U.S. dollar moved down against its major rivals in the European session on Thursday, after a data showed that the nation's consumer prices increased less than expected in October, raising hopes for a slower pace of tightening by the Federal Reserve in the future.

Data from the Labor Department showed that the consumer price index rose by 0.4 percent in October, matching the increase seen in September. Economists had expected consumer prices to climb by 0.6 percent.

The annual rate of growth in consumer prices slowed to 7.7 percent in October from 8.2 percent in September. The year-over-year increase was the smallest since January and came in below estimates for an 8.0 percent jump.

The Labor Department also said core consumer prices, which exclude food and energy prices, edged up by 0.3 percent in October after advancing by 0.6 percent in September. Economists had expected core prices to rise by 0.5 percent.

The annual rate of growth in core prices also slowed to 6.3 percent in October from 6.6 percent in September, coming in below estimates for 6.5 percent growth.

Separate data showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended November 5.

Initial jobless claims crept up to 225,000, an increase of 7,000 from the previous week's revised level of 218,000.

Economists had expected jobless claims to inch up to 220,000 from the 217,000 originally reported for the previous month.

Republicans are on track to attain a majority in the U.S. House of Representatives, but the control of the Senate is still in the balance.

President Joe Biden said that the 'red wave' did not happen and he is "prepared to work" with Republicans if they win control of one or both Houses of Congress.

The USD/JPY pair touched 143.18, its weakest level since September 23. The pair was worth 146.40 when it ended deals on Wednesday. The greenback is likely to challenge support around the 139.00 region, if it drops again.

The greenback depreciated to near a 2-month low of 1.1654 against the pound from yesterday's close of 1.1355. The greenback may locate support around the 1.27 level.

The greenback fell to near a 2-month low of 1.0160 against the euro, after rising to a 3-day high of 0.9936 at 6:05 am ET. The pair had closed Wednesday's deals at 1.0008. Next key support for the greenback is seen around the 1.08 level.

The greenback slipped to a 1-1/2-month low of 0.9733 against the franc, from a 2-day high of 0.9899 hit at 6:55 am ET. At Wednesday's close, the pair was valued at 0.9832. Should the greenback falls further, it is likely to test support around the 0.94 region.

The USD/CAD pair reached near a 2-month low of 1.3369, down from a 6-day high of 1.3571 seen at 5:50 am ET. The greenback was trading at 1.3526 per loonie at yesterday's close. Further fall in the currency may challenge support around the 1.30 level.

The greenback weakened to a 2-day low of 0.5993 against the kiwi, falling from a 6-day high of 0.5840 it logged at 6:55 am ET. At yesterday's trading close, the pair was quoted at 0.5881. Immediate support for the currency is likely seen around the 0.64 level.

The greenback dipped to a 1-1/2-month low of 0.6565 against the aussie, following a 6-day high of 0.6386 set at 5:25 am ET. The aussie-greenback pair was worth 0.6430 at Wednesday's close. On the downside, 0.70 is likely seen as its next support level.

U.S. monthly budget statement for October will be published in the New York session.

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