Dollar rises after inflation acceleration in the US; euro falls By Reuters

By Sinéad Carew

NEW YORK, Nov 11 (Reuters) – The dollar rose to nearly 16-month highs against the euro and other currencies on Thursday, after the hottest U.S. inflation reading in 30 years fueled bets that the Federal Reserve will tighten monetary policy faster than expected.

* Wednesday’s news that consumer prices rose last month at the fastest annual rate since 1990 fueled speculation that the U.S. central bank would raise interest rates earlier than expected, as traders question its stance that the Current high inflation is “transitory.”

* He was achieving a second consecutive day of gains, hitting a session high of 95.197, his highest level since July 22, 2020. Towards the end of the session he was up 0.36% at 95.1630. The euro, meanwhile, lost 0.28% to $ 1.1446 after hitting $ 1.1430, a low since July 2020.

* “It looks like we’re still dealing with the CPI knock-on,” said Vassili Serebriakov, currency strategist at UBS (SIX 🙂 in New York.

* Inflation-related second-day bets and the close of the Treasury market for the Veterans Day holiday likely reduced trading volume and increased price volatility, said Joseph Trevisani, senior analyst at FXstreet. com, a website that tracks the financial markets.

* “Generally, when the bond market is closed, there is less liquidity and you tend to get more exaggerated movements because there is less liquidity to absorb any particular movement,” he said.

* The British pound fell 0.31% to $ 1.3363 after hitting $ 1.3359, its lowest level since December 2020. Data showing that the British economy lagged behind its peers in the period July-September did little to help the currency.

* Meanwhile, the dollar rose 0.15% against the Japanese yen, trading in a range of 113.81 yen to 114.15 yen during the day after the US currency rose sharply on Wednesday.

(Additional reporting by Tommy Wilkes and Saikat Chatterjee in London, Edited in Spanish by Manuel Farías)