Dollar drops internationally as inflation cools more than expected
Business
Dollar drops internationally as inflation cools more than expected
NEW YORK (Reuters) - The dollar fell on Wednesday after data showed U.S. consumer prices rose less than expected in March, raising expectations that the Fed is likely to stop hiking rates after a possible increase in May.
The Consumer Price Index (CPI) climbed 0.1% last month, below economists’ expectations for a 0.2% gain, and down from a 0.4% increase in February. In the 12 months through March, the CPI increased 5.0%, the smallest year-on-year gain since May 2021.
The CPI rose 6.0% on a year-on-year basis in February.
Excluding the volatile food and energy components, the CPI increased 0.4% last month after rising 0.5% in February. Sticky rents continued to drive core CPI.
Economists at Goldman Sachs said after the data that they no longer expect the Fed to raise rates in June.
The dollar index fell 0.60% on the day to 101.49 and is down from around 102.11 before the data. The euro reached $1.10005, the highest since Feb. 2, and was last at $1.09930, up 0.73% on the day. The dollar dipped to 133.13 Japanese yen, down 0.47% on the day, from around 133.85 before the data.
