Dollar Firm Against Major Rivals As PPI Data Triggers Rate Hike Bets

(RTTNews) - After exhibiting weakness in the Asian session on Thursday, the U.S. dollar climbed higher in early New York session after data showing a bigger than expected increase in U.S. producer prices in the month of January, raised the possibility of the Fed continuing to stay aggressive with its rate hike moves.

The dollar lost its way subsequently, but inched higher later on in the session to score modest gains against some of its major counterparts.

The Labor Department said its producer price index for final demand climbed by 0.7% in January after edging down by a revised 0.2% in December. Economists had expected producer prices to increase by 0.4% compared to the 0.5% drop originally reported for the previous month.

The report also showed the annual rate of producer price growth slowed to 6% in January from 6.5% in December. The year-over-year growth was expected to slow to 5.4%.

Following the consumer price inflation and retail sales data released earlier this week, the report added to worries about the outlook for interest rates.

Traders have recently expressed concerns the Federal Reserve will raise rates higher than currently anticipated in an effort to combat inflation.

A separate Labor Department report showed first-time claims for U.S. unemployment benefits unexpectedly edged slightly lower in the week ended February 11th, dropping to 194,000, a decrease of 1,000 from the previous week's revised level of 195,000.

Economists had expected jobless claims to inch up to 200,000 from the 196,000 originally reported for the previous week.

The dollar index, which climbed to 104.23 from a low of 103.53, was last seen at 104.03, up 0.1% from the previous close.

Against the Euro, the dollar is trading at 1.0674, up marginally from the previous close of 1.0688.

The dollar has firmed to 1.1987 against Pound Sterling, gaining from 1.2032.

Against the Japanese currency, the dollar is weak, fetching 133.94 yen a unit, as against 134.17 yen on Wednesday.

The dollar is up against the Aussie at 0.6877, firming from 0.6905. Against Swiss franc, the dollar is firm at CHF0.9255, strengthening from CHF0.9237. Against the Loonie, the dollar is up at C$1.3458, firming from C$1.3396.