Dollar Mixed Following U.S. Inflation Data
The U.S. dollar showed mixed trading against its major
counterparts in the European session on Wednesday, after a report
showed that the nation's consumer prices increased in line with
economist estimates in December.
Data from the Labor Department showed that the consumer price
index rose by 0.4 percent in December after edging up by 0.2
percent in November. The price growth matched expectations.
The Labor Department said the advance by the consumer price
index was driven by an 8.4 percent jump in gasoline prices, which
accounted for more than 60 percent of the overall increase.
Excluding food and energy prices, the core consumer price index
inched up by 0.1 percent in December after rising by 0.2 percent in
November. The uptick in core prices also matched economist
Recent comments from Federal Reserve officials diminished
worries about the tapering on purchases of government and
On Tuesday, St. Louis President James Bullard and Boston Fed
chief Eric Rosengren said that the central bank is in no rush to
start winding down its bond-buying programme in the wake of the
economic fallout from the virus.
In another development, the House of Representatives will vote
on an article of impeachment against President Donald Trump over
his role in the deadly riot on January 6.
If the House were to vote in favor of the impeachment article,
it will trigger a trial in the Senate.
But a two-thirds majority would be needed for a conviction of
Trump, inferring that at least 17 Republicans would have to vote
The greenback fell during the Asian session, weighed by a drop
in the U.S. Treasury yields following a bond auction on
The greenback appreciated to 1.2155 against the euro, after a
2-day drop to 1.2223 at 2:30 am ET. The pair was worth 1.2206 when
it closed deals on Tuesday. The greenback is likely to find
resistance around the 1.19 level.
Data from Destatis showed that German wholesale prices declined
at the slowest pace in ten months in December.
Wholesale prices fell 1.2 percent on a yearly basis in December,
following a 1.7 percent drop a month ago. This was the slowest fall
in prices since February.
The greenback remained higher at 0.8881 against the franc,
following a 2-day low of 0.8850 seen at 2:30 am ET. At yesterday's
trading close, the pair was quoted at 0.8861. Should the dollar
continues its rise, 0.90 is possibly seen as its next resistance
The greenback was steady against the yen, after having risen to
104.00, from a 6-day low of 103.52 set in the Asian session. The
pair had closed Tuesday's deals at 103.75. On the upside, 105.00 is
likely seen as its next resistance level.
Data from the Bank of Japan showed that Japan's money supply
grew at a slightly faster pace in December.
The monetary aggregate M2 rose at a slightly faster pace of 9.2
percent annually after climbing 9.1 percent in November. At the
same time, the annual growth in M3 held steady at 7.6 percent.
The dollar eased to 1.3693 against the pound, not far from a
9-day low of 1.3701 hit at 4:30 am ET. The greenback is seen
finding support around the 1.42 mark.
U.S. monthly budget statement for December and Fed Beige book
report are scheduled for release in the New York session.
Euro vs US Dollar (FX:EURUSD)
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Euro vs US Dollar (FX:EURUSD)
From Jan 2020 to Jan 2021