© Reuters. Dollar holds steady against currency basket after U.S. PPI data
Investing.com -The dollar remained steady against a basket of the other major currencies on Wednesday after data showing that while U.S. producer prices rose slightly in August inflation pressures remained weak.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 91.92 by 09:05 AM ET (13:05 GMT), from around 91.8 ahead of the report.
The producer-price index rose by 0.2% in August from a month earlier, the Labor Department reported. Higher prices for gasoline accounted for most of the increase.
Core producer prices, which strip out food and energy components, rose by just 0.1%.
Economists had expected a 0.3% gain in overall producer prices and a 0.2% rise in core prices.
The report indicated that inflation remains sluggish, underlining uncertainty over the timing of the next rate hike by the Federal Reserve.
The dollar was steady against the yen, with USD/JPY last at 110.15, after rising to an overnight high of 110.29, the most since September 1.
The greenback hit a 10-month low of 107.30 against the Japanese currency on Friday before rebounding as tension over North Korea ebbed and concerns over the economic impact of Hurricane Irma eased.
The euro was fractionally higher against the dollar, with EUR/USD last at 1.1972.
The euro surged to two-and-a-half-year highs against the dollar last week after European Central Bank President Mario Draghi indicated that the bank may start tapering its massive stimulus program this autumn.
But he also said the strong euro is weighing on inflation, adding to pressure on the ECB at time when it is starting to decide how to proceed with tapering.
Sterling remained slightly weaker, with GBP/USD slipping 0.11% to 1.3268, off the one-year high of 1.3329 hit earlier.
The pound retreated after the latest UK employment report showed that wage growth remained sluggish, adding to fears over a squeeze on living standards.
With inflation outstripping pay growth the squeeze on the cost of living is getting worse, which will likely deter the Bank of England from raising interest rates. The BoE is to hold its next policy meeting on Thursday.