Dollar Rises Against Major Counterparts After Hot Inflation Data

The U.S. dollar gained against its major counterparts on Friday, lifted by data showing a larger than expected increase in the nation's annual rate of consumer price growth.

Data from the Commerce Department showed the annual rate of consumer price growth accelerated to 2.7% in March from 2.5% in February. The rate was expected to grow to 2.6%.

The annual rate of growth by core consumer prices in March came in unchanged from February at 2.8%, while economists had expected the pace of growth to slow to 2.6%.

On a monthly basis, the consumer price index rose by 0.3% in March, matching the increase seen in February as well as economist estimates. Excluding food and energy prices, core consumer prices also climbed by 0.3% for the second straight month, in line with expectations.

"Given the elevated levels of inflation - and this is the new normal for 2024 - the market is going to need to get over hopes for Fed rate cuts," said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance.

Revised data released by the University of Michigan showed consumer sentiment in the U.S. deteriorated by more than previously estimated in the month of April.

The University of Michigan said its consumer sentiment index for April was downwardly revised to 77.2 from a preliminary reading of 77.9.

Economists had expected the consumer sentiment index to be unrevised from the preliminary reading, which was down from 79.4 in March.

The dollar index, which climbed to 106.19 around noon, eased a bit subsequently, but was still up nearly 0.5% at 106.09.

Against the Euro, the dollar firmed to 1.0694 from 1.0731. The dollar strengthened to 1.2493 against Pound Sterling from 1.2512. Against the Japanese currency, the dollar rose sharply, fetching 158.21 yen, up 1.65% from Thursday's close.

The dollar weakened against the Aussie, easing to 0.6533 a unit of the Australian currency. Against Swiss franc, the dollar firmed to CHF 0.9146 from CHF 0.9121. The Loonie declined marginally against the greenback to C$ 1.3668.

Forex News