U.S. Dollar Falls After Inflation Data
The U.S. dollar was lower on Wednesday, as inflation data underlined expectations that the Federal Reserve will slow its pace of rate hikes in 2019.
The Labor Department said its consumer price index was unchanged from a month earlier, slowing from the 0.3% increase seen in October. Analysts had forecast a 0.1% increase.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, fell 0.3% to 97.09 as of 10:11 AM ET (15:11 GMT).
The dollar has been under pressure recently amid expectations that the Fed will pause its pace of interest rate hikes next year, despite an expected rate increase next week.
Meanwhile, the pound was higher, as investors bet that UK Prime Minister Theresa May will survive a vote of no confidence. May's party reached the threshold needed to trigger the vote and is scheduled to take place on Wednesday evening between 6:00 PM and 8:00 PM London time (1:00 PM ET to 3:00 PM ET).
GBP/USD jumped 1.2% to 1.2620.
The dollar was slightly lower against the safe-heaven Japanese yen, with USD/JPY falling 0.07% to 113.29. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion.
The euro was higher due to the lower U.S. dollar, with EUR/USD rising 0.4% to 1.1359.
Elsewhere, NZD/USD fell 0.3% to 0.6853 while AUD/USD was up 0.2% to 0.7219. The Canadian dollar increased with USD/CAD down 0.3% to 1.3351.