FOREX-Dollar drops to three-week lows after inflation data

  • 4/13/2021
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* Graphic: World FX rates tmsnrt.rs/2RBWI5E (Adds quote, context, updates prices; changes dateline, previous LONDON, byline) By Karen Brettell NEW YORK, April 13 (Reuters) - The U.S. dollar fell to three-week lows on Tuesday after data showed inflation making strong gains in March, though the rise was not expected to alter the Federal Reserve"s commitment to keeping interest rates at rock-bottom levels for years to come. The consumer price index jumped 0.6% last month, the largest gain since August 2012, after rising 0.4% in February, the Labor Department said on Tuesday. Excluding the volatile food and energy components, the CPI rose 0.3%. The so-called core CPI nudged up 0.1% in February. The dollar briefly spiked on the data, before reversing course and dipping to three-week lows. Treasury yields also fell after the data. "It keeps unchanged the outlook of the Fed to stay the low rate course over the foreseeable future," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington D.C. "We"re likely to see inflation move higher, before it eventually moves lower. So far the economy is sticking to the Fed"s script." Inflation is expected to show extra bullish comparisons to last year in the coming months due to a drop in price pressures in 2020 when businesses closed due to the spread of COVID-19. The U.S. central bank has said that it will look through temporary increases in inflation and analysts expect it will allow inflation to run hotter than previously expected before raising rates. The next major U.S. economic release will be retail sales data for March on Thursday. The dollar index fell as low as 91.93, the lowest level since March 23. The euro gained 0.24% to $1.1940. The greenback fell 0.22% to 109.16 Japanese yen . The Australian dollar, which is a proxy for global risk appetite, was little changed on the day at $0.7623. The New Zealand dollar gained 0.20% to $0.7042. The country"s central bank is expected on Wednesday to leave interest rates and its quantitative easing program unchanged. Bitcoin hit a record $63,275, extending its 2021 rally to new heights a day before the listing of Coinbase shares in the United States. ======================================================== Currency bid prices at 9:38AM (1338 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index 91.9200 92.0910 -0.16% 2.155% +92.3400 +91.9370 Euro/Dollar $1.1940 $1.1912 +0.24% -2.28% +$1.1940 +$1.1878 Dollar/Yen 109.1600 109.4250 -0.22% +5.71% +109.7450 +109.1250 Euro/Yen 130.33 130.26 +0.05% +2.69% +130.4900 +129.8100 Dollar/Swiss 0.9208 0.9222 -0.13% +4.10% +0.9259 +0.9209 Sterling/Dollar $1.3738 $1.3747 -0.05% +0.56% +$1.3768 +$1.3697 Dollar/Canadian 1.2560 1.2564 -0.03% -1.36% +1.2628 +1.2530 Aussie/Dollar $0.7623 $0.7623 +0.02% -0.88% +$0.7630 +$0.7585 Euro/Swiss 1.0995 1.0986 +0.08% +1.75% +1.1013 +1.0985 Euro/Sterling 0.8689 0.8669 +0.23% -2.76% +0.8712 +0.8641 NZ $0.7042 $0.7028 +0.20% -1.94% +$0.7043 +$0.7005 Dollar/Dollar Dollar/Norway 8.5095 8.4800 +0.48% -0.77% +8.5660 +8.4865 Euro/Norway 10.1621 10.1037 +0.58% -2.91% +10.1855 +10.0976 Dollar/Sweden 8.5404 8.5606 -0.07% +4.20% +8.5964 +8.5421 Euro/Sweden 10.1979 10.2050 -0.07% +1.21% +10.2188 +10.1811 (Additional reporting by Elizabeth Howcroft in London Editing by Paul Simao)

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