NEW YORK (AFP) - The US dollar firmed against other major currencies Thursday as US inflation data pointed to rising pressures that could ease the way for the Federal Reserve to up interest rates.
While falling crude-oil prices continued to dampen overall US inflation, data from the Labor Department revealed building pressures in a number of areas, including shelter and personal care.
"Some analysts are going to use these data to warn about 'deflation' and say the Federal Reserve should hold off on raising rates. But the details of the report show we are not in the grips of deflation and the Fed should stay on track to start raising rates in June," said FT Advisors economists in a research note.
Fed Chair Janet Yellen, in twice-yearly testimony to Congress this week, made it clear that the Fed was in no hurry to raise interest rates from near-zero, where they have been pegged for more than six years, as she prepared the ground for a hike this year.
The dollar had fallen slightly in response.
The Fed's tightening path stands in contrast to that of the European Central Bank, which will embark next month on an unprecedented bond-purchase program, spending more than 1.0 billion euros through at least September 2016 to try to revive growth in the sluggish eurozone.
Vassili Serebriakov of BNP Paribas said there was no precise reason for the euro's fall Thursday.
"It seems above all to reflect the still-high appetite of investors for the dollar, which outweighs fears linked to the testimony of Janet Yellen," he said.