Dollar drops vs euro after CPI
NEW YORK (Reuters) - The dollar declined against the euro on Tuesday after a reading of U.S. consumer prices suggested inflation was largely contained, backing a view that U.S. interest rates would lose their premium over European rates.
Against the yen, however, the dollar rose to a near three-month high after weak Japanese machinery orders reinforced expectations that the Bank of Japan would raise rates at a gradual pace.
“We’re one step closer to removing the inflation bias from the Fed statement with today’s CPI,” said Michael Woolfolk, senior strategist at The Bank of New York.
“This further supports the Fed’s case that slower U.S. growth will bring core inflation back into line with price stability without resorting to higher interest rates. That’s good for stocks and bonds and bad for the dollar,” he added.
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Source: www.reuters.com
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