Dollar Stable Against Majors As Us Consumer Prices Rise 0.2 Percent

US consumer prices rose 0.2 percent on-month in April, according to government data released at 8:30 am ET Wednesday morning.

Consumer prices rose 3.9 percent on an annualized basis in April.

Core CPI, which excludes volatile food and energy prices, rose 0.1 percent on-month and 2.3 percent on-year.

The dollar dropped immediately after the release, but has already recovered its losses.

At posting time, quotes are:

EUR/USD: 1.5435

GBP/USD: 1.9430

USD/JPY: 105.12

Technorati Tags: Currencies, Economy, USA, USD, fvarga

US Dollar Recovers on Data

The US dollar advanced against most of the major currencies as fresh economic data led the markets to reduce expectations of further rate cuts by the Federal Reserve, but fell to a two month low against the Canadian dollar as oil prices peaked just shy of $127 a barrel.

As a result, the low yielding Swiss franc and Yen took the biggest plunge against the greenback, with the New Zealand and Australian dollar following behind. Against the European currencies, the US dollar regained its footing as it rose against both the British Pound and Euro.

The British Pound continued to tally up losses as it fell to 1.946, while the Euro inched lower to trade at 1.547.

On the economic front, Advanced Retail Sales for the US fell in line with expectations as it dropped to -0.2 percent from 0.2 percent, while Retail Sales Less Autos topped estimates as it rose to 0.5 percent – helping to ease downside growth risks.

Amid the positive data, Fed Chairman Bernanke held a downgraded view of the economy as he stated the financial markets to be ‘far from normal’, and said that the Fed will increase borrowing to the financial sector to $150B from $100 a month.

The stock markets turned sour as Chairman Bernanke highlighted the downside risks in the financial sector, and pushed the markets into negative territory.

As a result, the DJIA fell 44.13 points to 12,832.18 points, with HP and JP Morgan Chase topping the losers. Among the broader indices, the S&P500 shaved 0.54 points to hold off at 1,403.04 points, with 195 stocks falling to a new 52 week low.

 

Technorati Tags: Currencies, Economy, USA, fvarga