Published: Thu, March 15, 2018
Entertaiment | By Mabel Barber

Dollar slides on tame United States inflation data, Tillerson ouster

Dollar slides on tame United States inflation data, Tillerson ouster

However, the report also showed that average hourly earnings rose by just 0.1% in February for an annual rate of 2.6%, down from 2.8% in January. This was in line with the market consensus.

Excluding the volatile food and energy components, the CPI gained 0.2 percent, in line with expectations, after accelerating 0.3 percent in January. Investors feared that as inflation reached and possibly exceeded the Federal Reserve's 2% target, the central bank may be inclined to raise interest rates faster than expected. A strong U.S. inflation reading could raise expectations for future interest rate increases, which would put pressure on non-yielding bullion.

Gold prices rose on Wednesday to a one-week high on a weaker dollar following US Secretary of State Rex Tillerson's sudden dismissal, which invigorated concerns of protectionist policies hampering global risk appetite.

Investors were bracing for a breakout number in U.S. inflation after a strong figure the previous month and when that did not happen, the dollar pared some of its gains against the yen and fell versus the euro, said John Doyle, director of markets at Tempus Consulting in Washington.

The Australian dollar was steady at $0.7860 after bouncing to a two-week high of $0.7898 the previous day on robust business indicators.

Brokers Ratings on: The Bank of New York Mellon Corporation (NYSE:BK)
Gabelli Funds Limited Liability Company has invested 0.98% of its portfolio in The Bank of New York Mellon Corporation (NYSE:BK). Finally, Rhumbline Advisers lifted its holdings in shares of Bank of New York Mellon by 1.0% during the 3rd quarter.

Last week, National Economic Council director Gary Cohn left the White House in the wake of President Trump's decision to impose new tariffs on imports of aluminium and steel from the rest of the world.

"For the dollar to rise above 107 yen again, it may need a clarification of the ongoing political scandal in Japan in addition to a hint by the Fed at this month's meeting that it might accelerate the pace of rate hikes", Yamamoto said. A positive outlook for the economy and inflation is likely to provide support for the dollar.

This week's US inflation data could generate more uncertainty for investors.

Markets will scrutinise the Federal Reserve's interest rate statement closely next week for changes in its members projections of rates over the coming years, as well as for new commentary on inflation.

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