The US Dollar has weakened against the Pound and has fallen against a number of its most traded peers after data released on Wednesday showed that producer price inflation in the United States came in below economic forecasts.
According to the Washington based Labour Department the producer price index for July came in at 0%, down from the 0.8% gain recorded in June. Economists had been calling for a rise of 0.3%. The core producer price index eased to 0.1% in July, again missing forecasts of a 0.2% rise.
“Inflation should gradually pick up, but it’s still going to be relatively low, there’s still a lot of slack in the economy” said the chief economist at Raymond James & Associates.
The US Dollar lost ground as the disappointing data created doubt among investors over whether the economic recovery is indeed strong enough to warrant the Federal Reserve to begin tapering its $85 billion a month monetary easing programme. As a result commodity and emerging market currencies saw gains.
Sterling was boosted earlier in the session and looks set to hold its gains for the rest of the day after the Bank of England released the minutes for its July policy meeting. Official data showing that the unemployment rate in the UK remained at 7.8% also supported the currency. The number of people claiming unemployment benefits fell by 29,200 in July better than the expected figure of a 15,000 decline.
Trader’s attention is now likely to move on to Thursday’s Consumer Price Index and Initial Jobless Claims data.
Current US Dollar (USD) Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6456
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7537
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0988
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 98.2986
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0354
(Correct as of 14:45 pm GMT)
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