Dollar slides after tame U.S. inflation data, Tillerson ouster

Dollar slides after tame U.S. inflation data, Tillerson ouster
* U.S. inflation data suggests gradual rate hike pace
* Fed funds futures reflect lower chance of 4th Fed hike
this year
* Trump fires Tillerson; dollar falls

(Adds new comment, updates prices in text, table)
By Gertrude Chavez-Dreyfuss
NEW YORK, March 13 (Reuters) - The dollar fell against most
major currencies on Tuesday after U.S. inflation data for
February was in line with expectations, suggesting the Federal
Reserve remained on track to raise interest rates at a gradual
The dollar also lost traction after U.S. President Donald
Trump fired Secretary of State Rex Tillerson and replaced him
with Central Intelligence Agency Director Mike Pompeo, marking
the biggest shakeup of the administration's Cabinet.

Pompeo's views typify Trump's hard line stance on
international political issues, including the Iran nuclear deal
and North Korea's nuclear and missile programs, analysts said.
Investors were bracing for a breakout number in U.S February
inflation after a strong figure the previous month and when that
did not happen, the dollar pared some of its gains against the
yen and fell versus the euro, said John Doyle, director of
markets at Tempus Consulting in Washington.
The Labor Department said on Tuesday the U.S. consumer price
index rose 0.2 percent last month after jumping 0.5 percent in
January. Excluding the volatile food and energy components, the
CPI gained 0.2 percent after accelerating 0.3 percent in

"The lower inflation readings relative to the previous month
decreased expectations that the Federal Reserve will need to
raise interest rates faster than anticipated," said James Chen,
head of research at in Bedminster, New Jersey.
After the data, Fed funds futures data showed a lower chance
of a fourth rate hike this year.
In late afternoon trading, the dollar index fell 0.2 percent
to 89.694, as the euro gained 0.5 percent on the
day to $1.2363.
The dollar also slid against the Swiss franc and the
British pound, as well as the Australian and New
Zealand dollars.
Tillerson's firing and Pompeo's appointment as his
replacement, coming a week after the resignation of U.S.
economic adviser Gary Cohn, also weighed on the dollar.
"Pompeo is seen as having a similar anti-globalist
perspective to that of Trump," said Chen. "Much of the risk of
this hard line stance for the dollar lies in the high likelihood
that the top U.S. diplomat will be yet another staunch supporter
of Trump's protectionist trade policies."
The greenback gained against the yen, rising 0.1 percent to
The yen came under some pressure from a scandal involving
Prime Minister Shinzo Abe. It weakened by 0.3 to 0.5 percent
against other major currencies after Japan's ministry of finance
said on Monday it altered documents for a sale of state-owned
land linked to Abe's wife.

Currency bid prices at 3:36PM (1936 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Euro/Dollar EUR= $1.2393 $1.2332 +0.49% +3.31% +1.2407 +1.2315
Dollar/Yen JPY= 106.5200 106.4100 +0.10% -5.46% +107.2900 +106.2600
Euro/Yen EURJPY= 132.01 131.24 +0.59% -2.35% +132.4200 +131.1200
Dollar/Swiss CHF= 0.9436 0.9474 -0.40% -3.13% +0.9494 +0.9431
Sterling/Dollar GBP= 1.3967 1.3905 +0.45% +3.37% +1.3994 +1.3875
Dollar/Canadian CAD= 1.2973 1.2837 +1.06% +3.15% +1.2977 +1.2830
Australian/Doll AUD= 0.7853 0.7872 -0.24% +0.67% +0.7897 +0.7851
Euro/Swiss EURCHF= 1.1697 1.1688 +0.08% +0.07% +1.1708 +1.1679
Euro/Sterling EURGBP= 0.8870 0.8868 +0.02% -0.15% +0.8886 +0.8852
NZ NZD= 0.7321 0.7294 +0.37% +3.32% +0.7354 +0.7293
Dollar/Norway NOK= 7.7389 7.7418 -0.04% -5.70% +7.7691 +7.7183
Euro/Norway EURNOK= 9.5928 9.5533 +0.41% -2.60% +9.5984 +9.5506
Dollar/Sweden SEK= 8.2139 8.2412 +0.14% +0.15% +8.2516 +8.1923
Euro/Sweden EURSEK= 10.1800 10.1656 +0.14% +3.46% +10.1830 +10.1350

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Jonathan
Oatis and Dan Grebler)

First Published: 2018-03-13 03:10:16
Updated 2018-03-13 21:53:03

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