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U.S. Dollar Extends Losses After Tillerson Fired

3/14/2018, 1:42:19 PMMarket Analysis
U.S. Dollar Extends Losses After Tillerson Fired

The U.S. dollar extended its losses on Tuesday, dampened by inflation data and political turmoil as Secretary of State Rex Tillerson was fired.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.29% to a session low of 89.63 by 12:15 PM ET (16:15 GMT).

Inflation rose as expected on Tuesday, easing expectation of the Fed hiking up interest rates at a faster pace. The Labor Department said its consumer price index increased 0.2% last month. In the 12 months through February, the CPI rose 2.2%. The numbers were below the Fed’s target rate of 2% core inflation.

Meanwhile the dollar was also pressured by news that U.S. President Donald Trump fired Secretary of State Rex Tillerson, replacing him with CIA Director Mike Pompeo.

The dollar fell against the yen, with USD/JPY up 0.09% to 106.52. The Japanese currency has been under pressure amid a public land sale scandal linked to the prime minister and his wife. USD/CHF fell 0.34% to 0.9436.

The euro was higher, with EUR/USD up 0.44% at 1.2394, while GBP/USD rose 0.55% to 1.3982.

In the UK Chancellor Philip Hammond gave his spring budget statement, where he revised the growth forecasts for 2018 but cut the forecast for 2019 and 2020.

Elsewhere, the Australian dollar was stronger, with AUD/USD up 0.05% at 0.7876, while NZD/USD increased 0.64% to 0.7342