Dollar dips on neutral news, sterling rises

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Dollar dips on neutral news, sterling rises

World FX rates adds commentary, byline, previous dateline LONDON By Sin ad Carew Dec 10 Reuters -- The dollar lost ground on Friday after U.S. consumer prices increased roughly in line with expectations in November, as investors bet that the actual number would not change the pace of interest rate hikes. Labor Department data showed an increase in consumer price index CPI as cost of goods and services went up despite supply constraints for the largest annual gain since 1982. The CPI went up 0.8% last month after a 0.9% increase in October, while the CPI went up 6.8% in the 12 months through November, following a 6.2% advance in October. This is compared to a 0.7% forecast from economists polled by Reuters. Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets, said the reading of the CPI was right on expectations but the Forex market had positioned for a higher reading. He said that the last dollar catalyst events this year are likely to happen next week after the FOMC meeting and Powell's speech after the meeting, because the FX market has been extremely long US dollars for several months and that we're almost out of events that could push the dollar higher before the end of the year. Anderson said that FX investors scale back positions for the year end of today's proce action, where the dollar fell on neutral news, is probably a prelude to that. The dollar went into negative territory after the news and while it gained ground to turn positive, it was still below pre-CPI level, despite a basket of rivals. The index was up 0.04% at 96.233, up 0.04%. After the day before paring gains to last trade were down 0.09% to $1.3210, sterling gained ground agaist the dollar. The euro was down 0.04% at $1.1289. China's yuan fell in offshore and onshore markets after the People's Bank of China raised FX reserve requirements for the second time in a row since June, and was further pressured by the central bank setting its trading band midpoint weaker than expected.