Most major currencies continued higher gains, amid the US dollar’s depreciation to a 3-week low at the start of the European session.
Several US stock indices have also reached recent highs and have also influenced Asian and European markets. The rising US inflation rate in March, was not as feared by markets who expected a very strong rise.
The consumer price index (CPI), a measure of inflation, recorded the highest increase in 8 and a half years in March of 0.6% from 0.5% previously.
On an annual basis, the inflation rate beat expectations for an increase of 2.5% by rising by 2.6%, the highest increase since August 2018.
The depreciation of the US dollar suggests that investors do not assume this high inflation reading will prompt the Fed to tighten its policy.
The decline in US 10 -year bond yields to around 1.62% due to high demand during the 30 -year bond auction also affected the depreciation of the greenback dollar.
Trading of the euro and the pound gained strength following the weakness of the USD despite less pleasant news about Johnson & Johnson delaying shipments of its vaccine to Europe following concerns over the side effects of blood clots emerging in America.
Meanwhile, commodity-linked currencies also rose higher, with the Aussie dollar and kiwi each recording gains to 3-week highs against the US dollar.
