By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) – The U.S. dollar rose on Friday after data showed inflation grew in March, though at a slower pace, keeping the Federal Reserve still firmly on track to raise interest rates at next week’s monetary policy meeting.
The dollar index, a measure of the greenback’s value against six major currencies, rose 0.7% to 102.10. Against the yen, the U.S. currency rose 1.5% to 136.07 yen.
The euro, meanwhile, fell 0.4% against the dollar to $1.0984
Friday’s data showed the personal consumption expenditures (PCE) price index edged 0.1% higher in March after rising 0.3% in February. In the 12 months through March, the PCE price index increased 4.2% after climbing 5.1% in February.
Excluding the volatile food and energy components, the PCE price index inched up 0.3% after increasing at the same rate in February. The so-called core PCE price index gained 4.6% on a year-on-year basis in March after rising 4.7% in February. The Fed tracks the PCE price indexes for its 2% inflation target.
“It’s another mixed bag of data, but what stands out is the frustratingly slow descent in core inflation,” said Joe Manimbo, senior market analyst at Convera in Washington.
“So, the dollar’s benefiting from elevated core inflation, which I think is leading the market to rethink the outlook for rate cuts later this year and I think it sets the stage for the Fed to reiterate that interest rates are likely to remain higher for longer.”
Following the data, the rate futures market has priced in a 90% chance of a 25 basis-point hike next week.
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Currency bid prices at 8:55AM (1255 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 101.9800 101.4500 +0.53% -1.459% +102.1700 +101.4200
Euro/Dollar $1.0984 $1.1029 -0.41% +2.51% +$1.1040 +$1.0963
Dollar/Yen 136.0800 134.0100 +1.56% +3.81% +136.4000 +133.3600
Euro/Yen 149.38 147.77 +1.09% +6.47% +149.5300 +147.2300
Dollar/Swiss 0.8949 0.8944 +0.07% -3.21% +0.8975 +0.8930
Sterling/Dollar $1.2489 $1.2500 -0.10% +3.25% +$1.2504 +$1.2447
Dollar/Canadian 1.3635 1.3591 +0.33% +0.64% +1.3668 +1.3592
Aussie/Dollar $0.6585 $0.6630 -0.67% -3.39% +$0.6642 +$0.6573
Euro/Swiss 0.9828 0.9862 -0.34% -0.68% +0.9868 +0.9827
Euro/Sterling 0.8793 0.8824 -0.35% -0.58% +0.8839 +0.8794
NZ $0.6148 $0.6148 +0.00% -3.18% +$0.6159 +$0.6124
Dollar/Dollar
Dollar/Norway 10.7340 10.6210 +1.14% +9.46% +10.7690 +10.6290
Euro/Norway 11.7920 11.7106 +0.70% +12.37% +11.8338 +11.6981
Dollar/Sweden 10.3314 10.2857 -0.04% -0.74% +10.3522 +10.2748
Euro/Sweden 11.3486 11.3530 -0.04% +1.78% +11.3720 +11.3029
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Karen Brettell; Editing by Andrew Heavens and Andrea Ricci)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.