WASHINGTON (dpa-AFX) - The U.S. dollar exhibited strength against its major counterparts on Friday on bets the Federal Reserve will tighten its monetary policy more aggressively to rein in inflation.
Data released by the Labor Department on Thursday that showed a bigger than expected increase in U.S. consumer prices has raised expectations that the central bank might hike interest rates by fifty basis points in its March meeting.
The data showed U.S. inflation accelerated more than expected to 7.5% on an annual basis in January, the highest reading since 1982.
St. Louis Federal Reserve Bank President James Bullard said Thursday afternoon that he favored a full percentage point interest rate increase by July.
In economic news today, preliminary data released by the University of Michigan showed U.S. consumer sentiment has unexpectedly slumped to its lowest level in over a decade in February.
The report showed the consumer sentiment index tumbled to 61.7 in February from 67.2 in January, hitting its lowest level since October of 2011. The drop surprised economists, who had expected the index to inch up to 67.5.
The dollar index climbed to 96.11, gaining about 0.6%.
Against the Euro, the dollar strengthened to $1.1348 from $1.1428. The euro slid against some other currencies as well, in reaction to comments rom European Central Bank President Christine Lagarde indicating that a rapid rate hike could hurt the economy and thus any move would be gradual.
In an interview with Redaktionsnetzwerk Deutschland, Lagarde said that raising interest rates would not solve any of the current problems.
The dollar is trading at $1.3557 against Pound Sterling, little changed from the previous close, after having weakened to $1.3609 earlier in the day.
The dollar is weaker against the Japanese currency, fetching 115.29 yen per unit, more than 0.6% down from Thursday's close of 116.01 yen.
Against the Aussie, the dollar is at $0.7138, gaining from $0.7166.
The Swiss franc is up slightly at $0.9243 a dollar. Data from the Federal Statistical Office showed Swiss consumer price inflation increased in January, rising 1.6%, following a 1.5% increase each in December and November. On a monthly basis, consumer prices grew 0.2% in January, after a 0.1% fall in the previous month.
The Loonie is weaker at C$1.2738 a dollar, drifting down from $1.2719 a dollar.
Copyright(c) 2022 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2022 AFX News
