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Forex News: Dollar Falls After Soft U.S. Consumer Inflation Data

Dollar Falls After Soft U.S. Consumer Inflation Data

10/13/2017 - 09:24:00 (RTTNews)

(RTTNews) - The U.S. dollar declined against its major counterparts in the European session on Friday, as the nation's consumer prices grew slightly less than expected in September.

The Labor Department said its consumer price index climbed by 0.5 percent in September after rising by 0.4 percent in August. Economists had expected prices to increase by 0.6 percent.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent in September after edging up by 0.2 percent in August. Core prices had been expected to rise by another 0.2 percent.

The U.S. treasury yields fell after the data, with the benchmark yield on the 10-year note falling 2.29 percent, while that of 2-year equivalent was down by 1.51 percent. Yields move inversely to bond prices.

Meanwhile, data from the Commerce Department showed that U.S. retail sales rose significantly in the month of September.

The Commerce Department said retail sales surged up by 1.6 percent in September after edging down by a revised 0.1 percent in August.

Economists had expected retail sales to spike by 1.7 percent compared to the 0.2 percent drop originally reported for the previous month.

The University of Michigan is scheduled to release its preliminary report on consumer sentiment in October at 10:00 am ET. The consumer sentiment index is expected to edge down to 95.0.

The currency fell against its major rivals in the Asian session, with the exception of the pound.

Reversing from an early 2-day high of 1.1805 against the euro, the greenback weakened to 1.1867.If the greenback falls further, 1.20 is possibly seen as its next support level.

Final data from Destatis showed that Germany's inflation held steady, as initially estimated, in September.

Consumer prices advanced 1.8 percent year-on-year in September, the same rate as seen in August. The rate also matched the estimate published on September 28. The greenback slid to 111.74 against the Japanese yen, a level unseen since September 26. The next possible support for the greenback-yen pair is seen around the 110.5 mark.

Data the Bank of Japan showed that Japan's M2 money stock rose 4.1 percent on year in September, coming in at 979.3 trillion yen.

That beat forecasts for an increase of 4.0 percent, which would have been unchanged from the August reading.

The greenback edged down to 0.9720 against the Swiss franc, off early 3-day high of 0.9771. The greenback is seen finding support around the 0.96 area.

Data from the Federal Statistical Office showed that Switzerland's producer and import prices climbed more than expected in September.

Producer and import prices advanced 0.8 percent year-on-year in September, faster than the expected growth of 0.6 percent.

The greenback hovered at a 11-day low of 1.3324 against the pound, compared to 1.3259 hit late New York Thursday. On the downside, 1.35 is likely seen as the next support for the greenback.

The greenback dropped to a 9-day low of 0.7183 against the kiwi and more than 2-week low of 0.7886 against the aussie, off its early highs of 0.7121 and 0.7818, respectively. Continuation of the greenback's downtrend may see it challenging support around 0.73 against the kiwi and 0.80 against the aussie.

The greenback, having advanced to a 2-day high of 1.2511 against the loonie at 8:15 am ET, reversed direction and fell to 1.2454. The next possible support for the greenback is seen around the 1.23 mark.

Looking ahead, U.S. business inventories for August and University of Michigan's preliminary consumer sentiment index for October are set for release shortly.

At 10:25 am ET, Federal Reserve Bank of Chicago President Charles Evans speak about the economy and monetary policy at the Wisconsin Summit on Financial Literacy.

At 11:30 am ET, Federal Reserve Bank of Dallas President Robert Kaplan speaks about the economy and monetary policy at the Chartered Financial Analyst Institute, in Boston.

For comments and feedback: contact editorial@rttnews.com

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