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Dollar pushes broadly higher after U.S. inflation data

Published 10/22/2014, 08:43 AM
Dollar extends gains vs. rivals on U.S. CPI report
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Investing.com - The dollar pushed higher against a basket of other major currencies on Wednesday, after the release of relatively positive consumer price inflation data from the U.S.

In a report, the U.S. Department of Labor said that consumer prices increased 0.1% last month, meeting estimates and following a 0.2% decline in August.

Core consumer prices, which exclude food and energy costs, rose 0.1% in September, disappointing expectations for a 0.2% gain. Core consumer prices were flat in August.

EUR/USD slid 0.33% to 1.2674, hovering near a one-week low of 1.2667 hit earlier in the session.

Sentiment on the euro remained vulnerable after Reuters reported on Tuesday that the European Central Bank is considering buying bonds issued by companies, or corporate debt, to help stimulate the ailing euro zone economy.

The report said the bank could activate the new stimulus plan as soon as December and start bond purchases by early next year.

GBP/USD dropped 0.44% to 1.6043 after the Bank of England's latest policy meeting showed an ongoing split on the necessity of raising interest rates.

The minutes of the BoE's October policy meeting showed that members voted unanimously to keep the asset puschase facility program on hold.

However, members Martin Weale and Ian McCafferty voted for the third consecutive time to raise interest rates to 0.75% from a record-low 0.5%.

The report came after BoE chief economist Andrew Haldane said Friday that he was in favor of keeping rates lower for longer due to uncertainties over the outlook for both domestic and global growth.

Elsewhere, the yen and the Swiss franc edged lower, with USD/JPY adding 0.13% to 107.13 and with USD/CHF rising 0.25% to 0.9514.

The commodity linked dollars turned steady to lower, with AUD/USD inching up 0.05% to 0.8782, NZD/USD dipping 0.05% to 0.7958, while USD/CAD advanced 0.41% to 1.1266.

Statistics Canada reported that retail sales fell 0.3% in August, compared to expectations for a 0.2% gain, after a 0.1% dip the previous month.

Core retail sales, which exclude automobiles, slipped 0.3% in August, confounding expectations for a 0.3% rise. July's figure was revised to a 0.5% decline from a previously estimated 0.6% drop.

Earlier Wednesday, official data showed that Australia's consumer price inflation rose 0.5% in the third quarter, more than the expected 0.4% increase, after a 0.5% gain in the three months to June.

The dollar index, which tracks the performance of the greenback against a basket of six major currencies, rose 0.32% to 85.72, the highest since October 15.

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