Dollar falls, but is on track to score its third consecutive weekly rise

By Saikat Chatterjee y Sinéad Carew

LONDON / NEW YORK, Nov 12 (Reuters) – The dollar lost some ground on Friday as high inflation wreaked havoc on consumer confidence, but was on track for its third straight weekly rise after the strong advance in Prices in the United States shocked markets on Wednesday, prompting investors to add bets on higher interest rates.

* The dollar turned negative after a survey by the University of Michigan showed a decline in consumer confidence in early November to its lowest level in a decade, as rising inflation reduced quality of life And few believe that the Federal Reserve authorities are taking sufficient measures to mitigate the impact.

* With short-term U.S. Treasury yields on the rise – 5-year yields hit a February 2020 high – investors are raising bets that the Fed will be forced to rise interest rates sooner rather than later.

* The dollar index, which measures the currency against six of its rivals, was down 0.06% to 95.0960, after falling to 94.991 after the news on consumer confidence. It previously hit its highest level since July 2020.

* “Consumers are clearly more concerned about real income growth, as inflation outpaces wages for now, and that is hurting confidence,” said Erik Nelson of Wells Fargo.

* The dollar was down 0.16% at 113.87 yen after falling to 113.77 yen.

* Money markets have been shaken since Wednesday, when data showed a widespread rise in consumer prices in the United States last month at the fastest annual rate since 1990, casting doubt on the Fed’s argument that pressures on the prices will be “transitory”.

* Markets now anticipate a first rate hike for July and a high probability of another adjustment for November.

* Meanwhile, the euro was down 0.03% at $ 1.1446 after earlier falling to a 16-month low of $ 1.1433. The British pound was up 0.33%.

(Reporting by Sinéad Carew in New York, Saikat Chatterjee in London and Kevin Buckland in Tokyo. Edited in Spanish by Javier Leira and Manuel Farías)

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