2024.01.1117:55:00UTC+00U.S. Dollar Appreciates As Strong Inflation Data Dents Early Rate Cut Hopes

The U.S. dollar erased its early losses against its major counterparts and climbed in the New York session on Thursday, as hotter-than-expected inflation data for December reduced odds of early rate cuts by the Federal Reserve.

Data from the Labor Department showed that the consumer price index climbed by 0.3 percent in December after inching up by 0.1 percent in November. Economists had expected consumer prices to rise by 0.2 percent.

Excluding food and energy prices, core consumer prices still rose by 0.3 percent in December, matching the increase seen in November as well as economist estimates.

The report also showed the annual rate of consumer price growth accelerated to 3.4 percent in December from 3.1 percent in November. The annual rate of growth was expected to tick up to 3.2 percent.

Meanwhile, the annual rate of growth by core consumer prices slowed to 3.9 percent in December from 4.0 percent in November. Economists had expected the pace of core price growth to decelerate to 3.8 percent.

A separate data showed that first-time claims for U.S. unemployment benefits unexpectedly edged slightly lower in the week ended January 6.

Initial jobless claims slipped to 202,000, a decrease of 1,000 from the previous week's revised level of 203,000. Economists had expected jobless claims to rise to 210,000 from the 202,000 originally reported for the previous week.

Traders dialed back rate cut bets following the data and now anticipate a 65.2 percent chance of a rate cut in March.

The greenback climbed to 1.0930 against the euro, from a 6-day low of 1.0998 hit at 8:30 am ET. The pair was worth 1.0972 when it closed deals on Wednesday. The greenback is seen finding resistance around the 1.06 mark.

The greenback firmed to 1.2690 against the pound, up from nearly a 2-week low of 1.2774 it logged at 1:30 am ET. The pair had ended yesterday's trading session at 1.2741. The greenback is likely to face resistance around the 1.24 region, if it gains again.

The greenback spiked up to a 6-day high of 0.8564 against the franc, from a 2-day low of 0.8490 seen at 1:30 am ET. At yesterday's close, the pair was quoted at 0.8507. Next key resistance for the greenback is likely seen around the 0.92 level.

The greenback moved up to a 6-day high of 0.6195 against the kiwi, reversing from a 2-day low of 0.6260 seen at 8:30 am ET. The pair had closed Wednesday's deals at 0.6228. Should the greenback strengthens further, it is likely to test resistance around the 0.60 region.

The greenback rallied to a 4-week high of 1.3422 against the loonie, recovering from a 2-day low of 1.3350 it registered at 7:45 am ET. The greenback was trading at 1.3379 against the loonie at yesterday's close. Further uptrend may take the greenback to a resistance around the 1.36 area.

After falling to a 2-day low of 0.6725 in the previous session, the greenback rose to a 6-day high of 0.6649 against the aussie. At Wednesday's close, the pair was valued at 0.6699. The greenback is poised to challenge resistance around the 0.64 mark.

The greenback jumped to more than a 4-week high of 146.41 against the yen from yesterday's close of 145.75. The greenback may test resistance around the 148.00 level.