News Story



Dollar Holds Onto Gains as Focus Turns to U.S. Inflation Data

- The dollar held onto gains against other major currencies on Thursday, as the release of upbeat U.S. data boosted optimism over the strength of the economy and as investors turned their attention to Friday's highly-anticipated U.S. consumer price inflation report.

The greenback strengthened after the U.S. Department of Labor reported on Thursday that initial jobless claims fell more than expected to 243,000 last week.

A separate report showed that producer prices increased 0.4% in September, in line with expectations. Core producer prices, which exclude food and energy also rose 0.4%, beating expectations for a 0.2% uptick.

The data came a day after the minutes of the Federal Reserve's September policy meeting showed that policymakers remain divided on inflation.

Several policymakers believe additional tightening will depend on upcoming inflation data. However, most Fed members said they feel another rate increase this year "was likely to be warranted," the report showed.

EUR/USD was down 0.13% at 1.1844, off a two-week high of 1.1880 hit earlier in the session.

The single currency's losses were capped however, as Catalonia stopped short of formally declaring independence from Spain this week.

Catalan leader Carles Puigdemont on Tuesday proclaimed the region's independence from Spain but said the effects would be postponed to allow for talks with the Spanish government, averting an immediate crisis.

Following meetings on Wednesday, Spanish Prime Minister Mariano Rajoy gave the Catalan government eight days to abandon its independence bid.

Elsewhere, GBP/USD dropped 0.42% to trade at 1.3164 after European Union chief negotiator Michel Barnier announced on Thursday that Brexit talks were at an "impasse".

Barnier added that the U.K. had told the EU that it wasn't ready to specify how much the nation should pay in exit fees.

The yen remained higher with USD/JPY down 0.13% at 112.35, while USD/CHF rose 0.21% to 0.9755.

The yen strengthened mildly after recent surveys showed that Japanese Prime Minister Shinzo Abe is likely to retain his coalition’s dominant position in parliament after the October 22 snap election.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.37% at 0.7817 and with NZD/USD gaining 0.51% to 0.7114.

Meanwhile, USD/CAD added 0.15% to trade at 1.2476, easing off the session's two-week lows of 1.2433.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.18% at 92.96 by 10:40 a.m. ET (14:40 GMT), off a two-week trough of 92.64 hit earlier in the day.

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