Dollar slumps as US inflation surge comes in line with expectations - SABC News - Breaking news, special reports, world, business, sport coverage of all South African current events. Africa's news leader.

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The dollar fell to a two-month low against a basket of currencies on Wednesday after data, which showed an expected surge in US consumer prices in December, fell short of offering any new impetus for the Federal Reserve’s policy normalization efforts.

The US Dollar Currency Index, which tracks the greenback against six major currencies, was down 0.7% at 94.944, after slipping as low as 94.903, its lowest since November 11.

The consumer price index increased 0.5% last month after advancing 0.8% in November, the Labor Department said on Wednesday. “The US economy appears ready for interest rate lift-off to start in March,” said Joe Manimbo, senior market analyst at Western Union Business Solutions. “ just a case of the market currently getting too ahead of itself with Fed normalization; we will need to see this inflationary impact from Omicron really play out for the Fed to hike four times and embark on quantitative tightening this year I think,” said Simon Harvey, senior FX market analyst at Monex Europe.

The Australian dollar, often considered a liquid proxy for risk appetite, rose 1.04% to a one-week high against the US dollar.

 

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