Yen higher, dollar squeezed as US inflation ebbs

Singapore, May 16 (BNA): The dollar nursed losses and the yen rose on Thursday after U.S. core inflation eased to its slowest pace in three years, pulling forward expectations for rate cuts in the world’s biggest economy.

Core U.S. inflation slowed to an annualised 3.6% in April, Wednesday’s data showed. That was in line with market expectations but, along with flat retail sales figures, suggested that conditions for rate cuts are falling into place, Reuters reported.

The battered yen extended a rebound into a second session, rallying about 0.6% to its strongest in two weeks at 153.6 to the dollar as the gap between U.S. and Japanese yields narrowed.

Other currencies touched multi-month highs against the greenback before steadying.

 The Australian dollar, which had surged 1% on Wednesday, hit a four-month high at $0.6714 but then paused.

It was last at $0.6685 as traders priced out any risk of a further rate hike in Australia.

The euro edged up to a two-month high at $1.0895. The New Zealand dollar also hit a two-month high at $0.6140. Sterling made a one-month high at $1.27.

China’s yuan rallied slightly to 7.2070 per dollar. Bitcoin regained a footing above its 100-day moving average and touched a three-week high of $66,695.


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