The U.S. dollar was broadly higher as fears over inflation resurfaced after a surprise announcement by major oil producers to cut production further, with traders wagering the Federal Reserve may need to increase interest rates at its next meeting.
Woman holds U.S. dollar banknotes in front of Euro banknotes in this illustration taken May 30, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
"While receding broader contagion risks, positive developments in China and expectations that the Fed is nearing the end of the tightening cycle should keep sentiments broadly supported, the oil price gain due to the surprise production cut is a fresh risk to inflation," said Christopher Wong, a currency strategist at OCBC in Singapore.The euro was down 0.44% to $1.0791, after touching a one-week low of $1.0788, while the Japanese yen weakened 0.46% to 133.41 per dollar.
Friday's report from the U.S. Commerce Department showed that personal consumption expenditures price index rose 5.0% in February from a year earlier, down from the 5.3% increase in January. A measure of core inflation - seen as a better gauge of future price increases - came in a shade lower than expected at 4.6%.
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