U.S. Dollar Falls As Core Inflation Slows

(RTTNews) - The U.S. dollar moved down against its major counterparts in the New York session on Wednesday, as core consumer inflation came in cooler than expected in December, supporting hopes of rate cuts by the Federal Reserve.

Data from the Labor Department showed that core CPI rose by 0.2 percent in December after increasing by 0.3 percent for four straight months. The uptick matched expectations.

Core inflation slowed to 3.2 percent year-on-year in December from 3.3 percent in November. Economists had expected the reading to remain unchanged.

The consumer price index climbed by 0.4 percent in December after rising by 0.3 percent in November. Economists had expected consumer prices to rise by another 0.3 percent.

The report also said the annual rate of growth by consumer prices accelerated to 2.9 percent in December from 2.7 percent in November, in line with economist estimates.

The dollar index, which measures the value of the USD against a basket of currencies, fell to 108.60.

Treasury yields dropped on the back of the report, with the yield on the benchmark ten-year note falling to 4.65 percent.

The greenback fell to a 1-week low of 1.0354 against the euro and a 5-day low of 1.2306 against the pound, from yesterday's close of 1.0307 and 1.2210, respectively. The greenback is likely to face support around 1.07 against the euro and 1.24 against the pound.

The greenback declined to an 8-day low of 0.9080 against the franc and near a 4-week low of 155.92 against the yen, from Tuesday's close of 0.9123 and 157.94, respectively. The greenback is poised to challenge support around 0.89 against the franc and 152.00 against the yen.

The greenback weakened to 8-day lows of 1.4302 against the loonie, 0.6246 against the aussie and 0.5654 against the kiwi, from yesterday's closing values of 1.4343, 0.6193 and 0.5604, respectively. The greenback is seen finding support around 1.34 against the loonie, 0.66 against the aussie and 0.60 against the kiwi.