Tuesday, January 18

The dollar falls in the world after soaring inflation in the US

The data, which adjusted to expectations, put pressure on policy makers to withdraw stimulus they used during the pandemic at a faster rate.

“The response of the dollar is due, in part, to the fact that interest rate expectations for next year are already very well priced in the markets,” said Kenneth Broux, currency strategist at Societe Generale in London.

Against a basket of rivals, the dollar briefly fell 0.1% to 96.10, before cutting losses in a volatile trading round. Money markets expect the US central bank to raise rates more than 60 basis points next year.

The consumer price index rose 0.8% last month, after rising 0.9% in Octoberthe Labor Department reported on Friday. In the 12 months to November, the CPI accelerated to 6.8%. This is the highest year-on-year rate since June 1982.

Losses in the dollar pushed other currencies higher. The British pound rose 0.2% to $ 1.324. The euro, seen as vulnerable to a Fed rate hike, especially if rate hikes in the euro area are delayed, trimmed its losses to trade 0.1% lower at $ 1.1281.

Meanwhile, the Chinese yuan fell in domestic and foreign markets after the People’s Bank (PBOC) raised foreign exchange reserve requirements for the second time since June, and came under even more pressure when the central bank set a band of fluctuation weaker than expected.