Dollar holds inflation driven gains, yen within touching distance of 150
The consumer price index (CPI) rose 0.4% in September, keeping the annual rate at 3.7%, the same as in August, while economists polled by Reuters had forecast it would gain 0.3% on the month and 3.6% year-on-year.
«The data will keep the Fed on its toes,» said Nicholas Van Ness, U.S.
economist at Credit Agricole CIB.
«While our base case remains an extended pause that lasts into 2024, further upside surprises in upcoming CPI and employment reports could leave a hike on the table for December (or after),» Van Ness added.
The dollar index, which measures the U.S.
currency against six of its major peers, ticked up 0.1% to 106.64, its highest level in a week. It rose 0.8% on Thursday, its biggest one-day jump since March 15.
Thursday's boost to the greenback saw the yen head back toward the sensitive 150-line briefly touched last week before strengthening sharply, which led some to believe authorities were intervening in the currency market.
The Japanese currency was last at 149.60 per dollar, keeping traders on guard should the currency weaken further.
«The risk of intervention is clearly high and that is constraining dollar-yen which would otherwise be higher,» said Adam Cole, chief currency strategist at RBC.
«This resolves itself in one of two ways; either they intervene and dollar-yen dips and resumes trading up from a lower level, or it sticks in a range for a while and the probability of intervention slowly diminishes.»
The euro was down 0.1% at $1.0517, while sterling was last trading 0.1% lower at $1.2164.
Sweden's crown edged up against both the dollar and euro after consumer price data came in higher-than-forecast, adding to risks that the Riksbank could raise rates further.
«These data reinforce the
