Dollar Weakening Against Inflation Report

Dollar Weakening Against Inflation Report

The dollar is down against all its competitors on Tuesday afternoon. Investors are in a cautious mood prior to the publication of US consumer prices on Wednesday. The inflation data will help to evaluate the dealer and the probability for a faster pace of interest rate increase by the Federal Reserve.

The report 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 important reports scheduled for release this week is retail sales on Wednesday, weekly initial jobless claims, the index of producer prices, industrial production, and real estate market index on Thursday, followed by housing construction, import and export prices and consumer sentiment on Friday.

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

French payroll employment increased further in the fourth quarter, data from the statistical office Insee showed on Tuesday. Private payroll employment increased by 53,300, or 0.3 percent more than in the third quarter. Employment had expanded by the same 0.3 percent, or 49,600 in the September quarter.

The Dollar fell to a low of $1.3923 against the pound sterling Tuesday, but has recovered since then, to $1.3875.

Inflation in the United Kingdom remained in January as the pressure of 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 in December, the Office for National Statistics reported Tuesday. Inflation is forecast to slow to 2.9 per cent.

British house prices inflation accelerated slightly in December, after easing in the previous month, figures from the office for National statistics on Tuesday. The house price index climbed by 5.2 per cent compared to the previous year. December, faster than the 5.0 percent in November, which was down from a revised 5.1 percent increase reported earlier.

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

Producer prices in Japan picked up 0.3 percent on month in January, said Bank of Japan on Tuesday. This was revised in line with expectations and down by 0.1 percent in December.