FOREX-Dollar falters after U.S. inflation rise eases, safe-haven yen, franc up

Reuters

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    * U.S. inflation rises less than expected in August
    * Fed may have flexibility on tapering, analyst says
    * Risk appetite down as U.S. stocks, yields fall
    * Safe-haven currencies -- yen and Swiss franc -- rise vs dollar

 (Adds new comment, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Sept 14 (Reuters) - The dollar fell against major currencies on Tuesday after data showed a
less-than-expected rise in U.S. inflation last month, creating uncertainty about the timing of the Federal
Reserve's tapering of asset purchases.
    Several Fed officials have suggested the U.S. central bank could reduce its buying of debt securities by
the end of the year, but said an eventual interest rate hike would not happen for some time.
    The Fed will hold a two-day monetary policy meeting next week, with investors keen to find out whether a
tapering announcement will be made.
    Tapering tends to benefit the dollar as it suggests the Fed is one step closer toward tighter monetary
policy. It also means the central bank will be buying fewer debt assets, effectively reducing the number of
dollars in circulation.
    Data on Tuesday showing the U.S. consumer price index, excluding the volatile food and energy
components, edged up just 0.1% last month has raised doubts about tapering this year, some analysts said. 
    August's core CPI rise was also the smallest gain since February and followed a 0.3% rise in July. The
so-called core CPI increased 4.0% on a year-on-year basis after gaining 4.3% in July.  urn:newsml:reuters.com:*:nL1N2QF1UC
    "The softer inflation prints caused investors to push back on bets that the Fed could move sooner to
taper bond purchases. Easing inflation would take the heat off the Fed to move prematurely," said Fiona
Cincotta, senior financial markets analyst at City Index.
    She also cited U.S. core producer prices (PPI) data for August released last week, which also rose at a
slower pace. Excluding the food, energy and trade services elements, producer prices rose 0.3% last month,
the smallest gain since last November. The so-called core PPI shot up 0.9% in July.  urn:newsml:reuters.com:*:nL1N2QC12B
    "So the evidence does appear to be building that peak inflation has passed. That said, supply chain
bottlenecks are expected to persist for a while so it's unlikely that either PPI or CPI will drop
dramatically or rapidly," Cincotta added.
    In afternoon trading, the dollar index was slightly down at 92.601  =USD , moving away from a more than
a two-week high on Monday.
    The euro was flat against the dollar at $1.1807  EUR=EBS . 
    Risk appetite soured on Tuesday as well, with Wall Street shares down while U.S. Treasury prices were up
sharply, pushing yields lower.
    Investors looked past decelerating inflation and focused on uncertainties about U.S. growth now clouded
by the economic impact of the Delta variant.    
    Against the safe-haven Swiss franc, the dollar dropped 0.4% to 0.9189 francs  CHF=EBS .
    Versus another safe-haven, the Japanese yen, the dollar fell 0.4% to 109.615 ye  JPY=EBS 
    In other currencies, the Australian dollar  AUD=D3  fell to a two-week low after Reserve Bank of
Australia Governor Philip Lowe painted a very dovish policy outlook with no rate hikes on the horizon until
2024.  urn:newsml:reuters.com:*:nL1N2QG077
    The Aussie dollar was last down 0.7% at US$0.7319. 
    In cryptocurrencies, bitcoin was last up 3.1% at $46,400   BTC=BTSP . Ether changed hands at $3,344
 ETH=BTSP , up 1.9%.
    
    ========================================================
    Currency bid prices at 2:57PM (1857 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
                                              Session                                             
 Dollar index      =USD       92.6000        92.6260     -0.01%         2.911%        +92.6650    +92.3210
 Euro/Dollar       EUR=EBS    $1.1809        $1.1810     -0.01%         -3.35%        +$1.1846    +$1.1801
 Dollar/Yen        JPY=EBS    109.6250       110.0050    -0.34%         +6.10%        +110.1550   +109.5300
 Euro/Yen          EURJPY=    129.44         129.91      -0.36%         +1.99%        +130.1900   +129.4300
 Dollar/Swiss      CHF=EBS    0.9192         0.9224      -0.35%         +3.90%        +0.9228     +0.9182
 Sterling/Dollar   GBP=D3     $1.3816        $1.3841     -0.17%         +1.13%        +$1.3912    +$1.3815
 Dollar/Canadian   CAD=D3     1.2682         1.2642      +0.33%         -0.40%        +1.2686     +1.2602
 Aussie/Dollar     AUD=D3     $0.7319        $0.7373     -0.73%         -4.86%        +$0.7373    +$0.7316
 Euro/Swiss        EURCHF=    1.0855         1.0888      -0.30%         +0.44%        +1.0904     +1.0855
 Euro/Sterling     EURGBP=    0.8545         0.8530      +0.18%         -4.39%        +0.8549     +0.8511
 NZ                NZD=D3     $0.7088        $0.7118     -0.44%         -1.31%        +$0.7151    +$0.7084
 Dollar/Dollar                                                                                    
 Dollar/Norway     NOK=D3     8.6450         8.6480      -0.21%         +0.49%        +8.6490     +8.5775
 Euro/Norway       EURNOK=    10.2120        10.2062     +0.06%         -2.44%        +10.2210    +10.1527
 Dollar/Sweden     SEK=       8.6040         8.6076      +0.04%         +4.97%        +8.6145     +8.5543
 Euro/Sweden       EURSEK=    10.1603        10.1560     +0.04%         +0.83%        +10.1740    +10.1300
 
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates    https://tmsnrt.rs/2RBWI5E
US inflation    https://tmsnrt.rs/3tDKbm4
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Gertrude Chavez-Dreyfuss in New York; Additional reporting by Saikat Chatterjee in London and
Shreyashi Sanyal in Bengalaru; Editing by Nick Zieminski and Paul Simao)
 ((gertrude.chavez@thomsonreuters.com; 646-301-4124; Reuters Messaging:
rm://gertrude.chavez.reuters.com@reuters.net))

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