Dollar rises against peers as inflation fears'remarkable'

Dollar rises against peers as inflation fears'remarkable'

RANDON, November 10 - The dollar rose against major peers on Wednesday, ending three days of weakness, after U.S consumer prices surged to their highest since 1990 and fuelled fears of inflation to be stickier than currently expected by the Federal Reserve.

The consumer price index increased by 6.2% in the 12 months through October. The rise in the US labor department was limited to 5.8% on Wednesday, according to analysts, according to the U.S. Labor Department.

The Fed last week stated its belief that current high inflation is transitory, but investors fear that underestimating the rise in prices could cause a costly policy mistake.

What do these numbers mean? Simply that inflation is going to be long-term and structural inflation has picked up speed, said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

He said that inflation has not peaked in the coming months and it is going to be a big challenge for the Fed in the coming months.

The data showed on Tuesday that the U.S. producer prices increased solidly in October due to surging costs for gasoline and motor vehicle retailing, suggesting that high inflation could continue.

The dollar index, which measures the dollar against six rivals, increased by 0.34% to 94.292 at 1357 GMT after it reached a high of 94.440 immediately after the data was released.

The dollar rose by 0.71% against Japan's yen when it was last seen on Oct. 11 and rose by 0.11% to 113.460.

Last week after the Bank of England's surprise decision to keep rates unchanged, sterling retreated by 0.41% to $1.3505 but stood well up from Friday's more than one-month low of $1.3425.

After the U.S. inflation data rose 1.7% to $68,150, it jumped 1.7% to $68,150, just below its all-time high of $68,564. 40 were marked on Tuesday.