- Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Adds Treasury auction results, comments from Fed's Harker, moves in Sterling and Russian rouble, updates prices)
The U.S. dollar fell to three-week lows on Tuesday after data showed inflation making strong gains in March, though the rise was not expected to alter the Federal Reserve's commitment to keeping interest rates at rock-bottom levels for years to come.
The consumer price index jumped 0.6% last month, the largest gain since August 2012, after rising 0.4% in February, the Labor Department said on Tuesday. Excluding the volatile food and energy components, the CPI rose 0.3%. The so-called core CPI nudged up 0.1% in February.
The dollar briefly spiked on the data, before reversing course and dipping to three-week lows.
"It keeps unchanged the outlook of the Fed to stay the low rate course over the foreseeable future," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. "We're likely to see inflation move higher, before it eventually moves lower. So far the economy is sticking to the Fed's script."
Inflation is expected to show extra bullish comparisons to last year in the coming months due to a drop in price pressures in 2020 when businesses closed due to the spread of COVID-19.
The U.S. central bank has said it will look through temporary increases in inflation, and analysts expect it will allow inflation to run hotter than previously expected before raising rates.
Philadelphia Fed Bank President Patrick Harker said on Tuesday it is unlikely that inflation will run out of control this year.
The next major U.S. economic release will be retail sales data for March on Thursday.
The dollar index =USD fell as low as 91.85, the lowest level since March 23.
The greenback also fell to session lows as Treasury yields fell, following a strong 30-year bond auction, the final sale of coupon-bearing supply this week.
The euro EUR=EBS gained 0.28% to $1.1945. The greenback fell 0.30% to 109.10 Japanese yen JPY=D3 .
The British pound GBP=D3 was little changed on the day at $1.3748 after the Bank of England said its chief economist would leave the central bank later this year.
The Australian dollar AUD=D3 , which is a proxy for global risk appetite, gained 0.29% to $0.7643.
The New Zealand dollar NZD=D3 gained 0.34% to $0.7051. The country's central bank is expected on Wednesday to leave interest rates and its quantitative easing program unchanged.
The Russian rouble extended gains in late trade on Tuesday after reports that U.S. President Joe Biden had a phone conversation with his counterpart, Vladimir Putin, as the market kept a close watch on geopolitical tensions between Moscow and the West.
Bitcoin BTC=BTSP hit a record $63,769, extending its 2021 rally to new heights a day before the listing of shares in crytpocurrency platform Coinbase in the United States.
======================================================== Currency bid prices at 3:25PM (1925 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 91.8580 92.0910 -0.25% 2.086% +92.3400 +91.8450 Euro/Dollar EUR=EBS $1.1945 $1.1912 +0.28% -2.23% +$1.1949 +$1.1878 Dollar/Yen JPY=D3 109.0950 109.4250 -0.30% +5.63% +109.7450 +109.0950 Euro/Yen EURJPY= 130.32 130.26 +0.05% +2.68% +130.4900 +129.8100 Dollar/Swiss CHF=EBS 0.9206 0.9222 -0.18% +4.05% +0.9259 +0.9205 Sterling/Dollar GBP=D3 $1.3748 $1.3747 +0.02% +0.64% +$1.3768 +$1.3697 Dollar/Canadian CAD=D3 1.2535 1.2564 -0.25% -1.58% +1.2628 +1.2530 Aussie/Dollar AUD=D3 $0.7643 $0.7623 +0.29% -0.62% +$0.7645 +$0.7585 Euro/Swiss EURCHF= 1.0997 1.0986 +0.10% +1.76% +1.1013 +1.0985 Euro/Sterling EURGBP= 0.8686 0.8669 +0.20% -2.81% +0.8712 +0.8641 NZ NZD=D3 $0.7051 $0.7028 +0.34% -1.80% +$0.7054 +$0.7005 Dollar/DollarDollar/Norway NOK=D3 8.4760 8.4800 -0.01% -1.26% +8.5660 +8.4790 Euro/Norway EURNOK= 10.1253 10.1037 +0.21% -3.26% +10.1855 +10.0976 Dollar/Sweden SEK= 8.5136 8.5606 -0.36% +3.86% +8.5964 +8.5139 Euro/Sweden EURSEK= 10.1687 10.2050 -0.36% +0.92% +10.2188 +10.1698
