The US Dollar strengthens after the report of February acceleration of inflation in the United States. The dollar index, which tracks the dollar’s performance against a basket of six leading global currencies, added 0.1 percent to 103 points after 5 p.m. EDT. The Japanese yen, which is on track to record its biggest one-day drop, is weakening significantly. Investors are losing faith that the Bank of Japan could lift its negative interest rate policy.
The same pace
Annual consumer price growth in the United States accelerated to 3.2 percent in February from January’s 3.1 percent pace. Analysts had expected the annual inflation rate to remain at January’s level, according to a Reuters poll.
On a month-on-month basis, consumer prices rose 0.4 percent in February, in line with analysts’ expectations. Month-on-month growth accelerated from 0.3 percent in January.
Inflation
The annual inflation rate in the US remains well above the US Federal Reserve’s (Fed) two per cent target. According to Reuters, this could delay the interest rate cut now expected in June.
“The greenback benefits from being both a high-yielding and defensive currency,” UBS analyst Yvan Berthoux told Reuters. “The Fed is expected to start cutting rates in the summer, but other central banks are likely to do the same,” he added.
The dollar gained 0.5 percent against the yen to JPY147.72 at the same time. The euro lost 0.1 percent against the dollar to $1.0918.
source: ÄŒTK
