· The dollar rose on Wednesday after a report showed U.S. producer prices rebounded in August and as traders positioned themselves ahead of consumer inflation data due on Thursday that will be closely watched by the U.S. Federal Reserve as it considers when to next raise interest rates.
The dollar index, which tracks the currency against a basket of six major rivals, was up 0.6 percent at 92.435, after rising to 92.53, its highest in more than a week.
The greenback advanced against the euro, with the single currency falling 0.68 percent to $1.1884. The euro’s decline accelerated after it slipped below $1.1950, a key technical level.
The dollar extended gains against the yen, with the currency last fetching 110.53 yen compared to levels around110.4 seen in the previous session.
· U.S. producer prices rebounded in August, driven by a surge in the cost of gasoline, and there were also signs of a pickup in underlying producer inflation.
The Labor Department said on Wednesday its producer price index for final demand increased 0.2 percent last month after slipping 0.1 percent in July. In the 12 months through August, the PPI rose 2.4 percent after advancing 1.9 percent in July.
· Inflation is being closely watched for clues on the timing of the next Fed interest rate increase. Economists expect the U.S. central bank will announce a plan to start reducing its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities at its Sept. 19-20 policy meeting.
The Fed is expected to delay raising rates until December.
· President Donald Trump said on Wednesday that taxes on rich Americans might rise, as he pursues a tax code overhaul and reaches out to both Democrats and Republicans in a push to win support for a plan still far from complete.
· House of Representatives Speaker Paul Ryan said an outline of a plan would be unveiled during the work week beginning Sept. 25, with congressional tax-writing committees crafting detailed legislation in the subsequent weeks.
· Mnuchin told Fox the administration would use its own economic assumptions to gauge the impact of its tax cuts on the federal budget deficit and the $20 trillion national debt, a key issue in Washington’s intensifying tax debate.
· Optimism over tax reform led to yields of the 10-year U.S. Treasury note rising to 2.19 percent on Wednesday, above the 2.17 percent seen in the prior session.
· Prime Minister Theresa May will make a speech on Britain’s future relationship with the European Union on Sept. 22 in the Italian city of Florence, her spokesman said on Wednesday.
· European Commission chief Jean-Claude Juncker urged European Union governments on Wednesday to use economic recovery and Brexit as springboards toward a closer union, built on an expanded euro zone and a pivotal role in world trade.
In his annual State of the European Union speech, Juncker sketched out a vision of a post-2019 EU where some30 countries would be using the euro, with an EU finance minister running key budgets to help states in trouble.
· Crude oil prices rose on Wednesday after the International Energy Agency (IEA) said a global surplus of crude was starting to shrink, even though U.S. data showed another big increase in domestic inventories due to Hurricane Harvey.
U.S. Energy Information Administration (EIA) data showed a build of 5.9 million barrels of crude last week, exceeding expectations.
U.S. crude settled up $1.07, or 2.2 percent, to $49.30 per barrel and Brent crude LCOc1 was up 89 cents to $55.16 a barrel.
Reference: Reuters, CNBC
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