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FOREX-Dollar dips after Fed calms U.S. inflation jitters

ForexMay 14, 2021 19:18
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© Reuters.

* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

By Iain Withers

LONDON, May 14 (Reuters) - The U.S. dollar edged lower against major currencies on Friday as risk appetite recovered across markets, after Federal Reserve officials helped calm jitters this week about accelerating U.S. inflation.

The greenback, seen as a safe haven in times of market volatility, was down a third of a percent against a basket of currencies, retracing some of its earlier gains on Wednesday after data showed a surprise surge in consumer prices. =USD consumer prices increased by the most in nearly 12 years in April on booming demand.

Federal Reserve officials have played down expectations of tighter policy, stressing price rises from the reopening of the economy should be temporary. stocks also edged higher, snapping a three-day rout. foreign exchange market has continued to stabilize overnight after absorbing the shock of the much higher US CPI... helped by the rebound in global equity markets," analysts at MUFG said in a note.

A slew of more U.S. data is due later on Friday, including retail sales and industrial production, likely to give further clues about the extent of the economic recovery.

The euro was among the gainers against the dollar on the day, up 0.4% at $1.21265. EUR=EBS

Ulrich Leuchtmann, head of FX and commodity research at Commerzbank (DE:CBKG), said in a note he believed U.S. inflation fears had led to the single currency being undervalued.

"There is no rational argument to underpin why EUR-USD trades below the levels seen on Wednesday morning – considering the reaction of other market segments," he wrote.

The pound is on track to gain more than half a percent over the week, on bets of a strong economic recovery in Britain and expectations any Scottish independence referendum could be a way off. GBP=D3 cryptocurrencies, Bitcoin BTC=BTSP was headed for its worst week since February - trading around $50,000 - after Tesla boss Elon Musk said this week he would stop accepting the token as payment due to environmental concerns. World FX rates

https://tmsnrt.rs/2RBWI5E

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FOREX-Dollar dips after Fed calms U.S. inflation jitters
 

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