US dollar strengthens on CPI data

The US dollar strengthened somewhat on Friday after new consumer price inflation data showed that consumer inflation was up 0.2 percent month-on-month, putting the annual core inflation rate at 2.8 percent, about what had been expected. Meanwhile a consumer sentiment survey by the University of Michigan showed that the mood of US consumers was better, mostly due to declining energy costs.

The US dollar added 0.7 percent to $1.2641 versus the euro on Friday, taking it to 0.2 percent ahead for the week. Even though sterling lost 0.6 percent to $1.8770 to the greenback on the day, it was 0.6 percent higher over the week as a whole. The Canadian dollar was also lower in relation to the US currency, dropping 0.1 percent to C$1.1211, again mostly due to the drop in the price of crude oil. The same was true of the Norwegian krona, which dropped 0.4 percent to NKr6.5404.

The New Zealand dollar however, was higher versus the US dollar this week after the Reserve Bank of New Zealand held interest rates at 7.25 percent. The kiwi added 4 percent over the week in relation to the greenback, to $0.6622.

Meanwhile, the Swiss franc weakened during the week after the Swiss National Bank raised rates to 1.75 percent on Thursday. The Swiss currency was 0.7 percent lower over the week versus the euro, to a 6½ year low of SFr1.5916, while it dropped 0.6 percent on the day and 0.9 percent on the week to the US dollar, to SFr1.2587.

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