Market Review - 13/02/2019  23:55GMT  

Dollar regains traction as demand for usd returns

The greenback regained traction in hectic trading in New York session and ended higher against majority of its peers on Wednesday on slight rise in U.S. CPI data together with rising U.S. Treasury yields and gain in global stock market.  
Reuters reported U.S. consumer prices were unchanged for a third straight month in January, leading to the smallest annual increase in inflation in more than 1-1/2 years, which could allow the Federal Reserve to hold interest rates steady for a while.   
Excluding the volatile food and energy components, the CPI gained 0.2 percent, rising by the same margin for a fifth straight month. In the 12 months through January, the so-called core CPI rose 2.2 percent for a third straight month.   
 Versus the Japanese yen, dollar traded with a firm bias in Asia and rose to 110.69, then ratcheted higher to 110.77 in European morning on cross-selling in jpy. Despite retreating to 110.60, price rallied to a fresh 6-week high of 111.06 near New York close due to usd's strength.  
Although the single currency edged up above Tuesday's high at 1.1341 to 1.1344 (Reuters), price met renewed selling and fell to 1.1312 in European morning and then tumbled to session lows of 1.1259 (Reuters) near the close in New York.  
The British pound went through a volatile session. Cable found renewed buying at 1.2888 in Asian morning and rose to 1.2924 (Reuters) ahead of European open, and then fell to 1.2874 in Europe due to soft U.K. inflation data. However, price staged a brief but sharp jump to session highs at 1.2959 but only to fall again to 1.2845 near NY close.  
Reuters reported British inflation fell to a two-year low in January, dipping below the Bank of England's target and offering some relief to households ahead of Brexit.   
Consumer prices rose at an annual rate of 1.8 percent in January after a 2.1 percent increase in December, the Office for National Statistics said on Wednesday. A Reuters poll of economists had pointed to a rate of 1.9 percent.  
In other news, Reuters reported Britain's opposition Labour Party will back a proposal to try to force the government to take "crucial decisions" on its Brexit plans by the middle of March, the party's Brexit spokesman said on Wednesday.   
Labour lawmaker Yvette Cooper, a leading campaigner against Britain leaving the European Union without an agreement, published a new bill on Tuesday that seeks to force a decision by government on whether Britain would leave with a deal, without a deal or extend the negotiation period by mid-March.   
On the data front, Reuters reported among U.K. manufacturers, the cost of raw materials was 2.9 percent higher than in January 2018.   
That marked the slowest annual increase since June 2016, the month of the Brexit referendum. Economists polled by Reuters had expected input prices to rise by 3.8 percent.   
Manufacturers increased the prices they charged by 2.1 percent last month compared, the smallest annual increase since October 2016 and weaker than the consensus forecast of 2.2 percent.  
Data to be released on Thursday :  
Japan GDP, UK RICS housing survey, China exports, imports, trade balance, France ILO unemployment rate, Germany GDP, wholesale price index, Swiss producer/import price, EU employment change, GDP, U.S. initial jobless claims, PPI, retail sales, business inventories, and Canada manufacturing sales, new housing price index.  

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