NEWS / Foreign Debt

Dollar inches up

LONDON: The dollar inched ahead against the euro here yesterday despite a fall in US consumer prices that dampened prospects for an interest rate hike by the US Federal Reserve.

The US currency suffered a minor wobble after it was revealed that inflation as measured by the consumer price index fell 0.5% in October while the core rate, which excludes energy and food, rose just 0.1%.

Both figures were below expectations on Wall Street, where analysts had been expecting a 0.3% drop in the headline consumer price index (CPI) and a 0.2% rise in the core rate.

The headline CPI has risen 1.3% in the past year, the slowest yearly increase since June 2002. The core-rate has risen 2.7% in 12 months.

More pessimism for the dollar followed when it was revealed that net long-term portfolio flows into the US slowed sharply in September to to 65.1bn dollars from 114.4bn in the previous month.

The euro was changing hands at $1.2804 against 1.2827 on Wednesday, ??151.31 (151.38), ??0.6777 (0.6789) and 1.5978 Swiss francs (1.5979).

The dollar stood at ??118.13 (118.00) and 1.2473 Swiss francs (1.2455). The pound was being traded at $1.8899 (1.8889). On the London Bullion Market, the price of gold rose to $623.90 per ounce from $617.75 late on Wednesday. - AFP