WASHINGTON (dpa-AFX) - The U.S. dollar gained against most of its peers on Tuesday after data showing a surge in producer price inflation raised expectations that the Federal Reserve will likely quicken its withdrawal from bond purchases.
The central bank is scheduled to announce its monetary policy on Wednesday. The Bank of England, the European Central Bank and the Bank of Japan are also scheduled to announce their monetary policies this week.
Data from the Labor Department showed the producer price index for final demand advanced by 0.8% in November after climbing by 0.6% in October. Economists had expected producer prices to rise by 0.5%.
With the stronger than expected monthly price growth, the annual rate of producer price growth accelerated to 9.6% in November from 8.8% in October.
The Labor Department said the year-over-year spike reflected the largest advance since 12-month data were first calculated in November 2010.
With inflation remaining at an elevated rate, the Fed is widely expected to accelerate its timetable for reducing bond purchases. There are also expectations that the central bank will begin raising interest rates shortly after bringing its asset purchase program to a halt.
The dollar index climbed to 96.59, gaining nearly 0.3%.
Against the Euro, the dollar firmed to $1.1261. The dollar weakened to $1.3231 against Pound Sterling from $1.3214.
The dollar firmed against the Japanese currency, advancing to 113.76 yen a dollar. Against the Aussie, the dollar strengthened to 0.7102.
The Swiss franc traded at 0.9241 a dollar, down marginally from Monday's close. The dollar gained against the Loonie, fetching C$1.2864 a unit, as oil prices fell amid concerns about outlook for energy demand.
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