US dollar weaker on higher inflation, lower consumer confidence

Story link: US dollar weaker on higher inflation, lower consumer confidence

The US dollar was weaker on Friday after figures were released showing that consumer prices were up 1.2 percent in September for the largest monthly increase in a quarter-century. The gain was mostly on the huge rise in energy prices in the wake of Hurricane Katrina, however, and core inflation was up only 0.1 percent on the month. Consumer confidence was also shown to be down in early October, further slowing sentiment toward the dollar.

The US dollar dropped 0.4 percent to $1.2075 in relation to the euro, lost 0.3 percent to ¥114.06 versus yen. Still, the dollar managed to end the week 0.2 percent higher against the yen and up 0.7 percent versus sterling. However the greenback fell 0.4 percent to end the week at $1.7678 against sterling.

Elsewhere, the Hungarian forint lost 0.7 percent to Ft252.52 against the euro. The Turkish lira dropped 1.2 percent to TL1.6493 versus the euro and was down 1.3 percent to TL1.366 in relation to the US dollar. Both currencies were affected by worries that reduced liquidity on a global scale could hurt their ability to finance their current account deficits.