Forex U.S. Dollar Strengthens as Consumer Prices Show Surprising Increase

Surprising rise in consumer prices boosts the U.S. dollar. Will this influence Federal Reserve's interest rates? Get the latest insights.

Oct 12, 2023 - 11:04
Oct 12, 2023 - 11:04
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Forex U.S. Dollar Strengthens as Consumer Prices Show Surprising Increase
Forex U.S. Dollar Strengthens as Consumer Prices Show Surprising Increase

The U.S. dollar got stronger on Thursday due to higher-than-expected consumer prices in September. This happened because of the increased cost of renting homes, which suggests that the Federal Reserve might keep interest rates high for a while.

The Labor Department, which watches over jobs and wages, said that the prices of things people buy went up in September more than they did in the past two years, but if we take out the prices of food and energy, it was the smallest increase.

Renting homes got more expensive. This is important because when people own homes, they could either rent them out or rent them from someone else. The cost of this went up by 0.6%, which is more than what some other people said.

Some experts say that even though this number seems high, it's not too bad. The government, which makes decisions about things like money, looks at official numbers, not what other people say. But sometimes, the official numbers and what other people say end up being the same.

The dollar, which is the money used in the United States, went up by 0.615% to 106.310. The euro, which is the money used in Europe, went down by 0.63% to $1.055.

Experts also say that even though prices went up in September, it doesn't mean they will keep going up. They think that prices will start to go down again, but it might take a little while. They also think that the government might not make interest rates higher because of this.

The government had said before that they might make interest rates higher, but now they might change their minds because they see that things are not getting more expensive as quickly as they thought.

Some other important things happened too. In another country called the United Kingdom, the way they make and sell things got a little better in August. But in September, it wasn't as good, so the money used there, which is called the pound, went down.

People who watch what happens in the world of money and trade say that if things don't get better in the UK, the government there might not make interest rates higher either. They think that because if things are not going well, making interest rates higher might make things worse.

In the United States, the government is also looking at what's happening with prices and jobs. They want to make sure that everything is okay before they make decisions about money and interest rates. They don't want to do anything that might make things worse. They want to be careful and make the right choices.

Also Read: Forex Dollar Strengthens against Euro Amid Israel-Palestinian Conflict

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