Dollar Fails To Hold Early Gains, Loses Ground Against Some Major Counterparts

After climbing higher Thursday morning following data showing a bigger than expected increase in U.S. consumer price inflation in the month of September, the U.S. dollar retreated and shed ground against most of its major counterparts.

Traders presumably felt concerns about inflation and higher interest rates have already been priced into the markets.

Data from the Labor Department showed consumer prices in the U.S. rose by more than expected in September, raising concerns about the outlook for interest rates. The data said the consumer price index rose by 0.4% in September after inching up by 0.1% in August. Economists had expected consumer prices to edge up by 0.2%.

The report also showed the annual rate of growth by consumer prices slowed to 8.2% in September from 8.3% in August, although the annual rate of growth by core prices accelerated to a 40-year high of 6.6% from 6.3%.

Another report from the Labor Department showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended October 8th.

The data said said initial jobless claims rose to 228,000, an increase of 9,000 from the previous week's unrevised level of 219,000. Economists had expected jobless claims to inch up to 225,000.

The dollar index, which climbed to 113.92 after the release of the inflation data, dropped to 112.15 around mid afternoon and was at 112.45 a little while ago.

Against the Euro, the dollar weakened to 0.9780 from 0.9808.

The dollar slid to 1.1335 against Pound Sterling, losing more than 2% from the previous close of 1.1102.

Against the Japanese currency, the dollar is up, fetching 147.23 yen a unit, compared with 146.89 yen on Wednesday.

Against the Aussie, the dollar is at 0.6298 after having firmed to 0.6170 earlier in the session.

The dollar is up against Swiss franc at CHF 1.0008, gaining from CHF 0.9976.

Against the Loonie, the dollar eased to C$1.3755 after strengthening to C$1.3979.

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