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US dollar edges higher as CPI beats forecasts

H.S. Borji
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US dollar edges higher as CPI beats forecasts

The US dollar was higher Tuesday as consumer price inflation rose faster than forecast in March, official data showed.

Consumer inflation rose 0.2 percent in March, following a gain of 0.1 percent the previous month, the Labor Department reported today in Washington. Compared to a year ago, consumer prices rose 1.5 percent, following a 1.1 percent advance in February. The so-called core measure, which excludes volatile products such as food and energy, rose 0.2 percent. Compared to a year ago, core prices rose 1.7 percent.

A broad consensus of economists forecast inflation to rise 0.1 percent monthly and 1.4 percent annually.

The faster than expected jump in consumer prices failed to shift market sentiment toward monetary policy. Because inflation pressures are still considered benign, the Federal Reserve has ample scope to keep interest rates at record lows.

The US dollar index, which tracks the greenback’s performance against a basket of six major currencies, rose more than 0.1 percent to 79.84.

The US dollar was little changed versus the European rivals as a spate of economic data from the UK and Eurozone kept the markets speculating. In the early North American session the EURUSD pair was trading at 1.3802, down more than 0.1 percent. The British pound gained less than 0.1 percent to 1.7635 US.

The North American pair gained more than 0.3 percent to 1.1003 amid positive manufacturing shipment data from Canada.

The greenback still has ample room to maneuver this week, as building permits, housing starts and industrial production data make their way through the financial markets. The Labor Department will also report on weekly jobless claims Thursday before the market closes for Good Friday.

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