Dollar Drifts Lower Against Major Counterparts

(RTTNews) - The U.S. dollar shed ground against its major counterparts on Tuesday after data showed a smaller than expected increase in U.S. producer prices in the month of December.

The report from the Labor Department said the producer price index for final demand crept up by 0.2% in December after climbing by 0.4% in November. Producer prices were expected to rise by 0.3%.

Meanwhile, the report said the annual rate of producer price growth accelerated to 3.3% in December from 3% in November. The acceleration matched economist estimates.

The smaller than expected monthly increase by producer prices helped ease recent concerns about the outlook for inflation and interest rates.

Results of a survey by the National Federation of Independent Business showed small business confidence in the U.S. improved in December to its highest level in more than six years as the uncertainty over the economic outlook cleared following the presidential election in November.

The NFIB Small Business Optimism Index rose 3.4 points to reach 105.1 in December, which surpassed economists' expectations for a score of 100.5.

The dollar index dropped to 109.18, coming off a multi-year high of 110.18 it touched in the previous session. The index had closed at 109.96 on Monday.

Against the Euro, the dollar weakened to 1.0310 from 1.0246, and against Pound Sterling, it eased to 1.2217 from 1.2203.

The dollar gained against the Japanese currency, rising to 157.98 yen a unit, up from 157.49 yen on Monday. Against the Aussie, the dollar weakened to 0.6195 from 0.6178.

The Swiss franc strengthened to 0.9122 a unit of the U.S. currency, gaining from 0.9167. The Loonie firmed to 1.4349 from 1.4372 against the dollar.