US dollar edges up on stronger US prices, industrial output

[NEW YORK] A modest strengthening of US wholesale inflation and industrial output in January gave the US dollar a slight boost against the euro Wednesday.

The US dollar pushed up about 0.1 per cent to US$1.1126 per euro, its gains restrained by the release of the minutes of the Federal Reserve's January policy meeting, which showed US central bankers concerned about risks to growth and taking a wait-and-see stance on rate policy amid persistent turbulence in global markets.

"The Fed sees more uncertainty for the economic outlook," said IHS Global Insight economists in a client note that said they now do not expect any new interest rate increase before June.

Canada's dollar jumped about 1.4 per cent against the US currency though, trading at C$1.3675 per dollar, helped by a surge in oil prices that came after Iran met with other Opec members seeking to rein in global production.

Brent crude traded in London rose more than seven percent on the news, igniting gains in equities as well.

Also helped by the surge in commodities, including metals, was the Australian dollar, which gained 0.9 per cent at 71.84 US cents.

But BK Asset Management's Kathy Lien said the Australian currency could suffer if the government releases a poor employment report for January on Thursday.

"While the retail sector helped offset the losses in mining, Australian mining companies are now on the verge of bankruptcy and we could see thousands of layoffs over the next several months," she said.

China's yuan fell against the dollar for a second straight day, by 0.2 per cent, after Monday's sharp climb on the back of central bank support.

At 6.529 yuan per dollar, it remained well above the 6.577 level held before the People's Bank of China intervened to curb mounting capital flight.

AFP