Tuesday, May 15, 2007

Dollar Slid on Lower-Than-Expected

The dollar slid against the euro and sterling after a key inflation indicator came in worse than expected, raising concern on a near term Fed rate cut.

US CPI rose 0.4% in April, less than the estimate of a 0.5% rise and down from a 0.6% reading a month earlier. Excluding food and energy, core CPI rose 0.2% as expected. After breaking the resistance at 1.3565 versus the dollar, the euro accelerated its rally to reach as high as 1.3608. The sterling climbed more than 100 basis points to a day high at 1.9871.

Besides, NY Fed manufacturing index rose from 3.8 to 8.03 in May as forecasted. US net long-term TIC flows increased from 58.1 billion to 67.7 billion in March, below the consensus forecast of 75 billion.

No comments: