Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Forex - Dollar Edges Higher on Upbeat Inflation Data as Fed Meeting Kicks Off

Published 06/12/2018, 12:59 PM
Updated 06/12/2018, 12:59 PM
© Reuters.

© Reuters.

Investing.com – The U.S. dollar edged higher against its rivals Tuesday as upbeat U.S. inflation data reaffirmed price pressure were building as the Federal Reserve got its two-day meeting underway.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.02% to 93.58.

The Labor Department said Tuesday its core consumer price index rose 0.2%, beating economists' forecasts for a 0.1% rise. While year-on-year, the core CPI rose 2.2% from 2.5% the prior month.

The inflation data come as the Federal Reserve's two-day meeting got underway, with an interest rate decision, update on both economic projections and the rate hike cycle and a press conference from chairman Jerome Powell due Wednesday.

Following the CPI data, Wells Fargo said it expects core PCE - the Fed's preferred measure of inflation – to reach the Fed's 2% target in the third quarter of year. The bank also said it expects the U.S. central bank to hike rates on Wednesday and twice more in 2018.

The dollar was also supported by a falling euro amid weaker Eurozone economic data but losses were limited somewhat by expectations the European Central Bank (ECB) Thursday could announce an exit to its massive bond buying programme.

Deutsche Bank said that while it expects the quantitative easing exit announcement will be made in July, it is a "very close call" and a June announcement would not come as a surprise.

The bank said, however, that an earlier announcement of an exit from quantitative easing would not signal the ECB was willing to adopt a more aggressive stance on monetary policy tightening.

EUR/USD fell 0.03% to $1.1781, while GBP/USD rose 0.17% to $1.3403 as latter pair came under pressure after several UK cabinet members reportedly stepped down as the Brexit Withdrawal Bill vote got underway.

USD/CAD rose 0.08% to C$1.2991 as rising oil prices supported the loonie.

USD/JPY rose 0.18% to Y110.25.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.