WASHINGTON (dpa-AFX) - The U.S. dollar gained notable ground against its major peers on Tuesday after data showed U.S. consumer inflation accelerated at the fastest pace in thirteen years in June, raising prospects for an early tapering of the asset buying program by the Federal Reserve.
Traders also looked ahead to Fed Chair Jerome Powell's testimony before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday.
Data released by the Labor Department today showed consumer prices in the U.S. saw the biggest monthly increase in thirteen years in the month of June, according to a report released by the Labor Department on Tuesday.
The Labor Department said its consumer price index jumped by 0.9% in June after climbing by 0.6% in May. Economists had expected consumer prices to rise by 0.5%.
The annual rate of consumer price growth accelerated to 5.4% in June from 5% in May, reaching the highest level since a matching spike in August of 2008.
Core consumer prices were up by 4.5% percent year-over-year in June, reflecting an acceleration from the 3.8% jump in May. Core prices saw the biggest annual increase since November of 1991.
The dollar index rose to 92.81, gaining about 0.6%.
Against the Euro, the dollar slid to 92.78, giving up nearly 0.6%. The Pound Sterling weakened against the dollar to $1.3816, down nearly 0.5%. UK retail sales logged a double-digit growth in June driven by the easing of lockdown restrictions, the British Retail Consortium reported. In June, retail sales advanced 13.1% on a yearly basis. Like-for-like sales were up 17% from the same period last year.
Against the Yen, the dollar firmed up, fetching 110.64 yen, compared to 110.37 yen Monday evening.
Against the Aussie, the dollar strengthened to 0.7445, up more than 0.4% from the previous close. Survey results from the National Australia Bank showed that Australia business confidence weakened in June due to rising number of infections in New South Wales and subsequent lockdowns.
The Swiss franc weakened to 0.9187 a dollar, dropping from 0.9151. Switzerland's producer and import prices increased by 2.9% year-on-year in June, data from the Federal Statistical Office showed. The producer price index increased 1.7% annually in June and import prices accelerated 5.6%. On a monthly basis, producer and import prices increased 0.3% in June.
Against the Loonie, the dollar was stronger at C$1.2515, gaining from C$1.2453.
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