Reply #7: Dollar vacillates after U.S. CPI data

[UpInArms]

http://cbs.marketwatch.com/news/story.asp?guid=%7BE8ED4FD4%2D3298%2D4B4A%2DBFE7%2DEEEFEA40CCF7%7D&siteid=mktw

CHICAGO (CBS.MW) - The dollar rose in the immediate wake of a U.S. report that showed an as-expected rise in U.S. consumer prices, renewing expectations that U.S. interest rates are headed higher.

But the dollar's morning gains invited a new round of selling, as investors mostly square up positions as the year draws to a close.

The dollar was at 104.43 yen, down 0.2 percent from late U.S. trade Thursday. The dollar had improved to around 104.62 just after the CPI report.

The euro was at $1.3270, up 0.1 percent from Thursday, but had dipped to $1.3229 after the report that showed the seasonally adjusted consumer price index rose 0.2 percent last month after increasing by 0.6 percent in October.

The core CPI, which excludes volatile food and energy costs, also rose 0.2 percent, matching October's increase, the Commerce Department's report showed.

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"Foreign investors will likely close their books by Monday and resume building positions after Christmas," he said. "Profit-taking, especially on the euro long positions, is expected to support the dollar until Christmas, but the euro is likely to resume its climb next year."

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