Dollar Loses Ground Against Major Counterparts

(RTTNews) - The U.S. dollar shed ground against its major counterparts on Wednesday, retreating after rising sharply in the previous session amid bets on aggressive rate hike by the Fed after data showed a rise in consumer price inflation.

The dollar index dropped to 109.28 in the European session, and despite having recovered to 109.67, remains below the flat line.

Data from the Labor Department, released earlier in the day, said the producer price index for final demand edged down by 0.1% in August after falling by a revised 0.4% in July.

The report also showed the annual rate of growth in producer prices slowed to 8.7% in August from 9.8% in July, roughly in line with estimates.

The annual Core PPI edged lower to 7.3% from 7.6% but surpassed the market expectation of 7.1%. On a monthly basis, the Core PPI was up 0.4% following July's increase of 0.3%.

Today, the greenback fell against the Japanese currency following reports the Bank of Japan conducted a rate check, presumably to prepare for currency intervention.

Japanese Finance Minister Shunichi Suzhi reportedly said today that the yen's moves in recent days have been "rapid and one-sided," and hence intervention in the market to buy the currency is among the government's options.

Against the yen, the dollar fell sharply around mid morning to 142.56 yen before regaining some lost ground. Still, at 143.17 yen, the dollar is down by about 1% from the previous close.

Against the Euro, the dollar is down marginally at 0.9979.

The dollar is weak against Pound Sterling as well. After drifting down to $1.1590, the greenback recovered some ground and was at $1.1540 a unit of Sterling a little while ago.

Against the Aussie, the dollar is trading at 0.6745, compared with 0.6730 on Tuesday.

The dollar is up marginally against Swiss franc at CHF 0.9626. Against the Loonie, the dollar is slightly weak at C$ 1.3164.