By Joseph Adinolfi, MarketWatch , Hiroyuki Kachi
NEW YORK (MarketWatch)--The ICE U.S. Dollar Index rose to its
highest level since 2003 Thursday, as currency traders bet that a
stronger-than-expected core consumer-price index number will prompt
the Federal Reserve to raise interest rates sooner than
expected.
The index (DXY), a measure of the greenback's strength against a
basket of six rival currencies, rose 1.15% to 95.1500, according to
FactSet data.
Fed officials have repeatedly said that the central bank
wouldn't raise interest rates until it is certain inflation is on
track to hit its target annual level of 2%.
The euro (EURUSD) traded at $1.1998, its lowest level since Jan.
26, compared with $1.1361 Wednesday.
Core CPI rose 0.2% in January, beating a consensus forecast of
0.1% growth from economists polled by MarketWatch. The headline CPI
number, which factors in more-volatile food and energy prices,
reflected a 0.7% contraction, in-line with economists'
forecasts.
Currency traders largely dismissed less-flattering
jobless-claims data and the solid durable-goods orders report,
analysts said. New unemployment claims rose to 313,000 last week, a
six-week high.
The volatile durable-goods orders number rose to 2.8% in
January, beating expectations. Meanwhile, orders for core capital
goods, a proxy for business investment, rose 9.5%.
"After throwing all this data in a blender and setting it to
purée, traders have come to the conclusion that this morning's
reports represent a small positive for the world's reserve
currency, and the dollar index is now edging up back up to the
mid-94.00s," wrote Matthew Weller, senior technical analyst at
Forex.com.
Elsewhere, the dollar rose to 119.46 yen(USDJPY), compared with
Yen118.87 Wednesday. The pound (GBPUSD) fell to $1.5405, compared
with $1.5521.
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