Dollar Weakening Ahead Of Inflation Report

The dollar is down against all of its major rivals Tuesday afternoon. Investors are in a cautious mood ahead of the release of the U.S. consumer price index on Wednesday. The inflation data will help traders to assess the likelihood for a faster pace of rate hike by the Federal Reserve.

The report is forecast to show prices rose at an annual rate of 1.9 percent in January, down from 2.1 percent in the previous month.

Other key reports slated for release this week include the retail sales on Wednesday, weekly jobless claims, producer price index, industrial production and housing market index on Thursday, followed by housing starts, import and export prices and consumer sentiment on Friday.

The dollar has dropped to around $1.2350 against the Euro Tuesday afternoon, from an early high of $1.2284.

French payroll employment continued to increase in the fourth quarter, data from the statistical office Insee showed Tuesday. Private payroll employment climbed 53,300 or 0.3 percent from the third quarter. Employment had advanced the same 0.3 percent or 49,600 in the September quarter.

The buck fell to a low of $1.3923 against the pound sterling Tuesday, but has since bounced back to around $1.3875.

UK inflation remained stable in January as downward pressure from auto fuel and food prices was offset by upward effect from recreational and cultural goods. Inflation came in at 3 percent in January, the same rate as seen in December, the Office for National Statistics reported Tuesday. Inflation was forecast to slow to 2.9 percent.

British house price inflation accelerated slightly in December, after easing in the previous month, figures from the Office for National Statistics showed Tuesday. The house price index climbed 5.2 percent year-over-year December, faster than the 5.0 percent rise in November, which was revised down from a 5.1 percent increase reported earlier.

The greenback has tumbled to a 5-month low of Y107.725 against the Japanese Yen this afternoon, from an early high of Y108.767.

Producer prices in Japan picked up 0.3 percent on month in January, the Bank of Japan said on Tuesday. That was in line with expectations and up from the downwardly revised 0.1 percent gain in December.

The material has been provided by InstaForex Company –

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