©Reuters. US dollar coins in an illustrative photo taken on July 17, 2022. Photo: Dado Rovic/Reuters.
NEW YORK (Reuters) – The euro rose against the euro on Friday after November U.S. producer price data came in slightly better than expected, casting doubt on whether the Federal Reserve will slow the pace of interest rate hikes in the meeting next week.
Data showed U.S. producer prices rose 0.3% last month, beating economists’ expectations by 0.2% in a Reuters poll.
While producer price index data showed the underlying trend in inflation to be moderate, fears have grown among investors that consumer price data, due to be released next week, ahead of the Federal Reserve, can surprise by exceeding expectations.
The Federal Reserve is in the midst of its fastest rate hike since the 1980s as it tries to curb the highest inflation rate in decades. Last month Fed Chairman Jerome Powell said he could slow the pace of interest rate hikes in December.
The dollar largely underperformed, but recovered some of its losses following the release of producer price data.
The dollar was up 0.13% against the euro at 1.05405 as of 14:38 GMT, although the single was still on course for a third consecutive week of gains.
The pound rose 0.27% to $1.2274, not far from a six-month high of $1.2345 hit on Monday, as the government unveiled reforms aimed at keeping London as one of the world’s most competitive financial centers .
It jumped as much as 0.7%, but gave up some of the gains after the release of producer price index data. And in recent trading, it rose 0.38% to 136.165 yen.
The dollar index, which measures the greenback’s performance against a basket of six major currencies, is still up about 9.5% this year, but fell more than 6% in the fourth quarter, reflecting pessimistic expectations about inflation and interest rates.
(Prepared by Rehab Alaa for the Arab Bulletin – Edited by Mustafa Saleh)
