(Bloomberg) -- A dollar gauge climbed to the highest since June 24 as US inflation data didn’t provide fodder for an imminent interest-rate cut by the Federal Reserve. All currencies in the Group of 10 weakened against the greenback with the yen lagging behind most peers.
- The Bloomberg Dollar Spot Index rose 0.3%, for fourth day of gains
- The consumer price index, excluding the often volatile food and energy categories, increased 0.2% from May, according to Bureau of Labor Statistics data out Tuesday
- On an annual basis, it advanced 2.9%
- “Todays inflation print showed that tariffs are having an impact on core goods and that impact is likely to get larger from here, limiting how much the Fed can cut and boosting the dollar,” said Skylar Montgomery Koning, a currency strategist at Barclays
- “It wasn’t the soft print that doves were looking for,” said Helen Given, a foreign-exchange trader at Monex Inc. “It looks like markets are seeing today’s CPI as the first in what could be a series of above-target inflation readings should the administration’s Aug. 1 deadline hold”
- The Fed staying on sidelines “till at least September” with the noise form trade policy will be supportive for the dollar, according to Aroop Chatterjee, a strategist at Wells Fargo
- EUR/USD fell 0.3% to 1.1625
- USD/JPY rose as much as 0.8% to 148.86, highest since April 3
- USD/CAD traded little changed at 1.3707
- Canadian consumer prices accelerated for the first time in four months and underlying price pressures firmed, likely keeping the Bank of Canada from cutting rates this month
- “Canada June CPI was largely in line with consensus and will keep BOC on hold,” Elias Haddad, a strategist at Brown Brothers Harriman & Co., said. “The BOC is near the end of its easing cycle, which is supportive of CAD”
- Some information comes from FX traders familiar with the transactions who asked not to be identified because they aren’t authorized to speak publicly
Reporting by Anya Andrianova and Vassilis Karamanis
