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Strong Inflation Data Lifts U.S. Dollar

The U.S. dollar moved up against its major counterparts in the New York session on Thursday, as the nation’s consumer prices rose more than expected in September, boosting hopes that the Federal Reserve will keep rates higher for a longer period.

Data from the Labor Department showed that the consumer price index climbed by 0.4 percent in September after increasing by 0.6 percent in August. Economists had expected consumer prices to rise by 0.3 percent.

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

The report also said the annual rate of consumer price growth was unchanged at 3.7 percent, while the annual rate of core consumer price growth slowed to 4.1 percent in September from 4.3 percent in August.

A separate report showed that first-time claims for U.S. unemployment benefits came in unchanged in the week ended October 7.

The report said initial jobless claims came in at 209,000, unchanged compared to the previous week’s revised level. Economists had expected jobless claims to inch up to 210,000 from the 207,000 originally reported for the previous week.

The greenback appreciated to a 6-day high of 149.48 against the yen and a 2-day high of 1.2251 against the pound, from Wednesday’s close of 149.16 and 1.2312, respectively. The currency is seen facing resistance around 155.00 against the yen and 1.19 against the pound.

The greenback strengthened to 0.9044 against the franc, after falling to a 3-week low of 0.8986 at 2:30 am ET. At yesterday’s close, the pair was valued at 0.9018. The greenback may face resistance around the 0.93 region, if it gains again.

The greenback firmed to a 2-day high of 1.0571 against the euro, from more than a 2-week low of 1.0639 seen at 2:30 am ET. The pair had finished Wednesday’s deals at 1.0619. Should the currency rallies again, 1.04 is possibly seen as its next resistance level.

The greenback climbed to 3-day highs of 0.6373 against the aussie and 0.5972 against the kiwi, from yesterday’s closing values of 0.6413 and 0.6020, respectively. Next key resistance for the currency may be located around 0.62 against the aussie and 0.58 against the kiwi.

The greenback edged up to 1.3609 against the loonie, from yesterday’s close of 1.3591. The greenback is likely to locate resistance around the 1.38 region.

U.S. monthly budget statement for September will be published in the New York session.

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