The US dollar recorded a decline on Tuesday after inflation data for August released showed the rise in U.S. inflation was less than expected. This leaves the market still guessing about when the Fed will do the tapering.
Several Fed officials have suggested that the U.S. central bank is likely to reduce purchases of debt securities by the end of the year.
The Consumer Price Index (CPI) recorded a significant increase. In August the CPI data rose 0.3% month -on -month or 5.3% on an annual basis. This reading is slightly lower than last month which recorded increases of 0.4% and 5.4% per annum in August.
The core CPI excluding the volatile food and energy components rose just 0.1% last month. It was the smallest gain since February and followed a 0.3% increase in July.
Thomas Hayes, a member of management at Great Hill Capital LLC in New York, argues that the slightly lower and lower -than -expected CPI readings, however, could give the Fed room to announce faster tapering.
The dollar index, which measures the strength of the greenback, slipped slightly from its previous two -week high, trading around 92.498, a decline of 0.16%.
The NZD, on the other hand, depreciated against the US dollar by 0.15% ahead of the GDP report early Thursday morning. Experts expect that New Zealand’s GDP will record 2 figures overall. The euro continued to strengthen against the US dollar at the $ 1.1827 trading level.
