Forex - U.S. Dollar Steady as Inflation Data Points to Fed Hike
The dollar was steady against other currencies on Friday as inflation numbers supported continued rate hikes from the Federal Reserve.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, inched up 0.01% to 96.56 as of 10:23 AM ET (15:23 GMT), not far from over a one-week high.
The dollar fell against the Japanese yen, with USD/JPY down 0.28% 113.74. The Canadian dollar was lower, with USD/CAD rising 0.27% to 1.3189.
The producer price index (PPI) increased 0.6% in October, while core PPI rose by 0.5% from a month earlier.
Core PPI is a key gauge of underlying producer price pressures that excludes food and energy costs.
The higher-than-expected numbers support the Fed’s gradual rate increase policy, which helped boost the greenback. The Fed held interest rates steady on Thursday, as expected, but remained on track to continue gradually tightening.
The central bank hiked U.S. interest rates three times this year and is widely expected to do so again in December.
Meanwhile, the University of Michigan's consumer sentiment index fell to 98.3 from 98.6 in the prior month.
The euro and sterling were pushed lower by the stronger dollar.
EUR/USD fell 0.11% to 1.1351, while the pound was volatile over Brexit uncertainty. GBP/USD was down 0.11% to 1.3048.
Elsewhere, the NZD/USD inched down 0.01% to 0.6754, while AUD/USD lost 0.15% to 0.7246.