NEW YORK: The dollar index was barely higher on Tuesday as traders were cautious a day ahead of highly anticipated US inflation data.
The dollar zig-zagged after Tuesday's data showed US producer prices increased solidly in October, indicating that high inflation could persist for a while amid tight supply chains related to the pandemic. But traders were holding back on big moves ahead of consumer price index (CPI) data due out on Wednesday morning with inflation being the hot topic for discussion. "Looking for any sort of major moves ahead of the US CPI tomorrow is going to be futile. We will likely see a little bit more movement on the FX side of things after CPI," said Mazen Issa, senior FX strategist at TD Securities.
He expects "a stronger print than consensus on what is already expected to be a fairly hot CPI print."
Economists polled by Reuters see monthly CPI accelerating to 0.4% from the previous month's 0.2% rise, with the closely watched year-on-year core measure gaining 0.3 percentage points to 4.3%, well above the Fed's average annual 2% inflation target. The dollar index was up 0.03% at 94.0730 while the euro dipped 0.03% to $1.1583.
Elsewhere, the yen reached a one-month high against the greenback of 112.73, before fading back to trade last at 112.91 . Sterling, hammered last week in the wake of the Bank of England's surprise decision to keep rates on hold, was down 0.21% at $1.3537.
The New Zealand dollar dipped 0.61% to $0.7122 after jumping on Monday. It has been drawing support from traders wary of the possibility that the Reserve Bank of New Zealand could raise rates by as much as 50 basis points later this month.
The risk-sensitive Australian dollar dropped 0.6% to trade at $0.7377. Bitcoin rose to a record $68,564.40 before reversing course. It was last down 0.4% at $67,261. Also earlier ether hit a record high of $4,842.65.
Comments
Comments are closed for this article.