Dollar rebounds on hot US import prices
U.S. import prices increased 0.9% last month, a jump that raised market fears that the Federal Reserve's fight to tame inflation is not done and could delay plans for policymakers to cut interest rates.
The market also was grappling with a drop in the number of Americans filing new claims for
unemployment benefits
last week that pointed to underlying strength in the U.S. labor market.
The jump in the price index for U.S. imports in April was the largest one-month increase since it rose 2.9% in March 2022, the Bureau of Labor Statistics said. Prices for U.S. imports last declined on a monthly basis in December, BLS said.
«The market is of course very sensitive to signs of inflation from wherever it may come, and the import price series that we got today was meaningfully stronger than expected,» said Brain Daingerfield, head of G10 FX strategy at NatWest Markets in Stamford, Connecticut.
«The Fed wants to see consistent progress in more than just one point. The number we got yesterday — the CPI — was not as bad as feared,» he said. «But I don't think it was enough to materially change the market's outlook for the Fed and that's reflected in the way that the dollar has bounced back today.»
The dollar rebounded from a sharp decline against all major currencies on Wednesday when data showed
U.S. inflation slowing to 0.3% in April from a month earlier.
The slowing of consumer prices prompted markets to price in the likelihood that the Fed would cut rates twice this year, with the first coming as early as
