Investing.com – The dollar continued to give up gains against its rivals Wednesday following subdued inflation data and a rise in sterling after UK Prime Minister Theresa May reportedly secured support from her Cabinet for a draft Brexit deal.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.41% to 96.75.
The Labor Department said Wednesday its core consumer price index rose 0.2% last month, in line with economists' estimates, but for the 12 months through October consumer prices rose 2.1%, lower than forecasts.
The subdued inflation report did little to puncture Wall Street's Fedreal Resrerve theory, with analysts touting further room for prices to increase in the year ahead, keeping the Fed on course to hike rates.
"While businesses are beginning to see a break on some commodity prices, tariffs and a tight labor market are pushing other costs higher," Wells Fargo said. "We expect core inflation to trend up in the year ahead, spurred by more businesses willing to raise prices."
In the UK, sterling turned positive after the Telegraph reported that the prime minister had secured support from cabinet for the deal.
GBP/USD rose 0.18% to $1.3005.
EUR/USD rose 0.18% to $1.1310 after Italy re-submitted its draft budget for 2019 to the European Commission, but left its growth and deficit forecasts unchanged, raising the risk of backlash from lawmakers in Brussels.
USD/JPY traded rose 0.36% to Y113.42 as lingering concerns about slowing Chinese economic growth weighed on risk sentiment, supporting demand for the safe-haven yen.
USD/CAD, meanwhile, rose 0.04% to C$1.3245 as gains in the pair were limited after oil prices firmed, boosting the oil-price-sensitive loonie.