WASHINGTON (dpa-AFX) - The U.S. dollar gained against some of its major counterparts on Thursday on bets the Federal Reserve will keep interest rates higher for a longer time amid persisting concerns about inflation.
Data from the Labor Department said the producer price index for final demand crept up by 0.2% in March after climbing by 0.6% in February. The uptick matched expectations.
Meanwhile, the report said the annual rate of producer price growth accelerated to 2.1% in March from 1.6% in February.
The annual rate of growth was the fastest since surging 2.3% last April but came in slightly slower than the 2.2% jump forecast by economists.
The producer price inflation data came after the Labor Department released a separate report on Wednesday showing consumer prices rose by slightly more than expected in March.
The report also said the annual rate of consumer price growth accelerated to 3.5% in March from 3.2% in February. Economists had expected a more modest acceleration to 3.4%.
The slightly slower than expected annual growth in producer prices may partly offset the interest rate concerns raised by yesterday's hotter-than-expected consumer price inflation data.
The dollar index, which dropped to 105.03 after the release of the producer price inflation data, recovered to 105.53, but pared gains subsequently. The index was at 105.28 a little while ago, recording a marginal gain.
Against the Euro, the dollar firmed to 1.0727 after early weakness. The euro weakened as the European Central Bank left its key interest rates unchanged but signaled a possible cut at the next meeting in June amid a drop in inflation and anaemic growth.
The dollar weakened to 1.2555 against Pound Sterling, after having firmed to 1.2510 earlier in the day. Against the Japanese currency, the dollar was up slightly at 153.26 yen.
The dollar weakened to 0.6538 against the Aussie. Against Swiss franc, the dollar strengthened to CHF 0.9099, from Wednesday's close of CHF 0.9130. The dollar strengthened to C$ 1.3728 earlier in the day, but eased to C$ 1.3688, up just marginally from the previous close.
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