Dollar dips on rate rumours
The dollar struggled today after economic indicators pointed to better-than-expected news, easing the pressure on the Federal Reserve to raise rates.
Today the dollar stood at 1.7683 to the pound and 1.2083 to the euro.
After a week in which the likelihood of an interest rate steadily rose on the back of comments from the Federal Reserve, today's news took some analyst by surprise.
Consumer costs were up by just 0.1 per cent for September, around half the increase expected, with the inflation appearing to be relatively controlled.
Putnam Investments portfolio manager Paresh Upadhyaya told Reuters there were "signs the economy may be slowing a bit and inflationary pressures may be more contained than they were expecting".
With Federal Governor Donald Kohn also offering some qualifications for the expected interest rate rise - saying that "inflation in an underlying sense is not high now" - the urgency of the rate move is less than previously thought.
As such the dollar fell away from the high watermarks reached this week, although most analysts expect the Fed will react swiftly to any changes in the economy.