Dollar advances as US inflation creeps up
The dollar gained against other major currencies Wednesday after a slight but unexpected rise in US inflation, while the market continued to speculate about eurozone monetary policy.
US consumer prices rose slightly in September, with the consumer price index (CPI) up 0.1 percent, the Labor Department said.
Analysts had expected prices to remain unchanged from August, when they fell 0.2 percent for the first time in a year and a half.
Excluding food and energy, prices still rose 0.1 percent in September.
The rise in US consumer prices "is probably what drew the most attention in the market today, supporting a little the dollar against the euro and the yen," said Vassili Serebriakov of BNP Paribas in New York.
Year-over-year, the CPI remained steady at 1.7 percent in September, well below the Federal Reserve's 2.0 percent inflation goal for price stability.
"The headline surprisingly rose, and some of the components edged higher but overall, inflation remains in control and the core measure remains below the Fed's two percent watch," said Jennifer Lee, senior economist at BMO Economics.
Rumors that the European Central Bank could step up its monetary stimulus, including by buying corporate bonds, continued to percolate.
A member of the ECB's decision-making governing council, Belgium National Bank chief Luc Coene, said on Wednesday that several of his colleagues had mentioned the idea of buying corporate bonds but that it had yet to be seriously discussed.
"Investors remain hooked on declarations or rumors swirling around the central banks," noted Franklin Pichard, director of Barclays Bourse in Paris.
Possible action of the ECB would have what it takes "to restore a semblance of optimism in an uncertain world," he added.
