U.S. Dollar Falls As Producer Inflation Cools

(RTTNews) - The U.S. dollar depreciated against its major counterparts in the New York session on Thursday, as the nation's producer prices fell unexpectedly in March, strengthening expectations that the Federal Reserve will end its tightening cycle soon.

Data from the Labor Department showed that the producer price index fell by 0.5 percent in March following a revised unchanged reading in February.

Economists had expected producer prices to come in unchanged compared to the 0.1 percent dip originally reported for the previous month.

The report also showed the annual rate of producer price growth slowed dramatically to 2.7 percent in March from 4.9 percent in February. Economists had expected the pace of growth to slow to 3.0 percent.

Separate data showed that first-time claims for U.S. unemployment benefits rose more than expected in the week ended April 8.

The report said initial jobless claims climbed to 239,000, an increase of 11,000 from the previous week's unrevised level of 228,000. Economists had expected jobless claims to rise to 232,000.

U.S. stocks advanced as PPI data eased concerns about inflation and reinforced expectations that the Fed will end the rate increases after its next meeting in May.

The greenback touched 0.8859 against the franc, its lowest level since January 2021. The pair was valued at 0.8959 at Wednesday's close. The greenback is seen finding support around the 0.87 mark.

The USD/JPY pair dropped to a 3-day low of 132.89. At yesterday's trading close, the pair was worth 133.13. The greenback may face support around 129.00 the region, if it falls again.

The greenback weakened to more than a 1-year low of 1.1067 against the euro and more than a 10-month low of 1.2537 against the pound, from yesterday's closing values of 1.0991 and 1.2484, respectively. The greenback is likely to challenge support around 1.12 against the euro and 1.27 against the pound.

The USD/CAD pair fell to nearly a 2-month low of 1.3367. The greenback was trading at 1.3441 against the loonie at yesterday's close. Further fall in the greenback may find support around the 1.32 mark.

The greenback dipped to an 8-day low of 0.6772 against the aussie and a 1-week low of 0.6299 against the kiwi, from Wednesday's closing quotes of 0.6688 and 0.6208, respectively. Next key support for the currency is likely seen around 0.69 against the aussie and 0.64 against the kiwi.