U.S. consumer prices rose slightly in December and monthly underlying inflation pressures retreated.
This could allow the Federal Reserve to keep interest rates unchanged at least through this year. The U.S. central bank last month left interest rates steady and signaled monetary policy could remain on hold this year.
Minutes of the Fed’s Dec. 10-11 meeting published early this month showed policymakers generally expected inflation would eventually hit the central bank’s target.
The Labor Department said on Tuesday its consumer price index increased 0.2% last month after climbing 0.3% in November. The monthly increase in the CPI has been slowing since jumping 0.4% in October. In the 12 months through December, the CPI rose 2.3% after gaining 2.1% in the 12 months through November.
In the 12 months through December, the core CPI increased 2.3%, the largest gain since October 2018, after rising 2.3% in November.
The U.S.-China Phase 1 trade deal is due to be signed at the White House on Wednesday. The trade agreement marks the first step toward ending a damaging 18-month trade dispute between the world’s two largest economies.
START TRADINGForex – U.S. consumer prices slightly up in December
Traders cashed in on recent record highs and waited for a long-awaited U.S.-China trade deal.
The US dollar rose as much as 0.3% against the Japanese yen to 110.22 yen, its highest since late May versus a currency that tends to weaken when investors are buoyant. It last stood at 109.97 yen.
The dollar index gained 0.1% to 97.43.
The Swiss franc rose to its strongest since April 2017 at 1.0763 against the euro, up nearly 0.5%. It rose 0.4% versus the dollar. Some analysts said this reflected nervousness, as risky emerging market currencies fared poorly.
The euro was mildly supported by risk-on sentiment, remaining off a two-week low of $1.10855 hit on Friday, last trading at $1.1124.
The pound weakened further on Tuesday, hitting a seven-week low against the euro at 85.95 pence before recovering. The currency has come under pressure from weak data releases, raising the chances of a cut to interest rates by the Bank of England. Money markets forecast an almost 50% probability of a cut at a meeting on Jan. 30.
Global oil benchmark Brent crude rose 1% to near $65 a barrel on Tuesday, snapping four straight days of declines. Brent crude gained 65 cents to $64.85 per barrel by 1311 GMT. U.S. WTI crude futures rose 52 cents or 0.9% at $58.60 a barrel.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money