The Dollar Still Gains as CPI Sparks Concerns

The euro declined, Thursday, as the USD rose on the back of the strongest U.S. inflation reading in over 30 years fueling expectations of Fed interest rate hikes next year.

U.S. CPI data showed the biggest gain in four months, lifting the annual increase to 6.2%, the strongest year-on-year rise since November 1990 and following a 5.4% leap in September.

The U. S. dollar pushed the Euro below $1.15, leaving the next major chart support level down at $1.12. Immediate resistance can be seen at 1.1522(38.2%fib), an upside break can trigger rise towards 1.1544.

On the downside, immediate support is seen at 1.1455 (23.6%fib), a break below could take the pair towards 1.1400(Psychological level).

The Sterling fell to its lowest level of 2021 against the dollar on Thursday as the British economy appeared to lose momentum and a surge in U.S. inflation boosted the USD amid bets that the Federal Reserve would hike interest rates faster than expected.

Data released by the Office for National Statistics showed Britain’s economy grew by 0.6% in September but estimates for previous months were revised lower, leaving the economy still smaller than it was in February 2020.
As for the USD/CAD pair, the Canadian dollar declined against its U. S. counterpart on Thursday as accelerating U.S. inflation data added to pressure on the Federal Reserve to hike interest rates sooner than expected.

The dollar strengthened against the Japanese yen on Thursday as after the hottest U.S. inflation reading in a generation encouraged bets on interest rate hikes.