CANBERA (dpa-AFX) - The U.S. dollar firmed against its major counterparts in the New York session on Wednesday, as hotter-than-expected inflation data for March diminished the likelihood of an interest rate cut by the Federal Reserve in June.
Data from the Labor Department showed that consumer prices climbed by 0.4 percent in March, matching the increase seen in February. Economists had expected consumer prices to rise by 0.3 percent.
Excluding prices for food and energy, core consumer prices still rose by 0.4 percent for the third consecutive month. Core consumer prices were also expected to increase by 0.3 percent.
The report also said the annual rate of consumer price growth accelerated to 3.5 percent in March from 3.2 percent in February. Economists had expected a more modest acceleration to 3.4 percent.
Meanwhile, the annual rate of core consumer price growth came in at 3.8 percent in March, unchanged from February. Core price growth was expected to slow to 3.7 percent.
Treasury yields rose following the report, with the yield on the benchmark ten-year note hitting 4.55 percent.
The data lowered the probability of rate cut in June and Fed funds futures indicate only a 15.1 percent chance of a 25 basis point reduction.
The greenback firmed to 8-day highs of 1.0741 against the euro and 1.2545 against the pound, from yesterday's closing values of 1.0856 and 1.2677, respectively. The greenback is seen finding resistance around 1.05 against the euro and 1.23 against the pound.
The greenback touched 152.90 against the yen, its highest level since 1990. At yesterday's close, the pair was valued at 151.73. It may find resistance around the 156.00 level.
The greenback moved up to more than a 6-month high of 0.9128 against the franc from yesterday's close of 0.9035. Should the greenback strengthens further, it is likely to test resistance around the 0.94 region.
The greenback climbed to a 1-week high of 0.6509 against the aussie and a 4-1/2-month high of 1.3694 against the loonie, from Tuesday's close of 0.6628 and 1.3570, respectively. The greenback is poised to challenge resistance around 0.63 against the aussie and 1.38 against the loonie.
The greenback appreciated to a 1-week high of 0.5978 against the kiwi, from near a 3-week low of 0.6083 seen at 8:05 am ET. The pair was worth 0.6059 at yesterday's close. The greenback is likely to face resistance around the 0.58 region.
The Fed minutes from the March 19-20 meeting will be published at 2 pm ET.
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