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U.S. dollar rallies amid signs of fewer rate hikes

2019-01-12 10:42

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The U.S. dollar extended gains on Friday, as investors continue to digest the latest remarks of U.S. Federal Reserve's chair and other Fed officials, increasing their bets on fewer interest rate hikes in 2019.

Fed Chairman Jerome Powell stressed patience in the central bank's policy making in a forum at the Economic Club of Washington on Thursday, saying it can move "flexibly and quickly" if economic data appear to be favorable.

Powell's remarks were in line with the Federal Open Market Committee's cautious stance on Fed's monetary policy, which was shown in its Dec. 18-19 policy meeting minutes released on Thursday.

Charles Evans, president of the Federal Reserve Bank of Chicago, also said on Thursday that the Fed has "good capacity to wait" in terms of determining whether to raise interest rates or not.

Moreover, U.S. Consumer Price Index fell in December for the first time in nine months by 0.1 percent, also the weakest reading since March last year, according to the Labor Department on Friday.

Analysts said the tepid data indicated mild inflation pressure, which would give Fed the leeway to mull their rate-hike decisions later this year.

The dollar index, which measures the greenback against six major peers, was up 0.13 percent at 95.6708 in late trading.

In late New York trading, the euro fell to 1.1465 dollars from 1.1499 dollars in the previous session, and the British pound increased to 1.2845 dollars from 1.2744 U.S. dollars in the previous session. The Australian dollar increased to 0.7206 dollar from 0.7182 dollar.

The U.S. dollar bought 108.48 Japanese yen, higher than 108.42 Japanese yen of the previous session. The U.S. dollar increased to 0.9844 Swiss franc from 0.9842 Swiss franc, and it was up to 1.3271 Canadian dollars from 1.3227 Canadian dollars. 
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