Dollar supported by United States inflation data, European Central Bank easing expectations

Australian shares nudged up 0.2 percent, while Japan’s Nikkei (.N225) lost 0.7 percent as the yen rallied in response to the soft dollar.

The yield on benchmark 10-year Treasury notes was at 1.975 percent in Asian trading, down from its USA close of 1.982 percent on Wednesday.

The pound traded near a 3-week high of $1.5495 (GBP=D4) struck overnight, when it soared 1.5 percent on upbeat British employment data. The pair has made session high at 1.1417 and hit lows at 1.1358 levels.

While a few market watchers have been speculating that the Federal Reserve (the Fed) will raise the federal funds rate at its meeting this month, the central bank is more likely to do what it did in September: nothing. “That gave a few stability to the dollar”, said Sebastien Galy, currency strategist at Deutsche Bank in New York.

Economic data from Group of 10 nations are missing analysts’ estimates by the most in four months, according to a Citigroup Inc. index, including weaker-than-expected USA retail sales, and slowdowns in Japan, China, the United Kingdom and Germany.

Even after downbeat U.S.jobs data earlier this month reduced the odds of a Fed rate increase this year, the dollar was rangebound against the yen, hovering between ¥119 and ¥121 since late August. It was up 0.1% against the dollar on a weekly basis.

Adding to the weak data was the Labour Department’s inflation report that showed producer prices fell 0.5 per cent in September, the sharpest drop since January.

The dollar also found a defender in New York Federal Reserve president William Dudley, who said today that a rate rise in 2015 remains likely and downplayed any disagreement within the Federal Open Market Committee.

US stocks snapped two days of losses, helped by strength in a few third-quarter earnings reports. The regional FTSEurofirst 300 .FTEU3 rose 1.4 percent.

The Dow Jones industrial average (.DJI) rose 132.01 points, or 0.78 percent, to 17,056.76, the S&P 500 (.SPX) gained 17.33 points, or 0.87 percent, to 2,011.57 and the Nasdaq Composite (.IXIC) added 44.67 points, or 0.93 percent, to 4,827.52. Government bond yields move in an inverse direction as bond prices.

Spot gold was up 0.1 percent at $1,185.73 an ounce at 2:56 p.m. EDT (1856 GMT), after climbing to $1,190.63, the highest since June 22 and the fifth straight day higher.

Crude oil fell yesterday on expectations United States government data will show a rise in inventories. December Brent, which will be the spot contract from Friday, was more actively traded than November, settling up 4 cents at $49.73. Neither EconoTimes nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.