US dollar gains as US posts modest uptick in inflation

[NEW YORK] The US dollar gained on international currency markets Friday as an inflationary indicator showed strength and investors anticipated next week's decisions on US and Japanese monetary policy.

The British pound dropped sharply in relation to the US dollar, coinciding with reports on Friday that Britain expected to begin formal talks to secede from the European Union by early next year.

The US consumer price index rose 0.2 per cent for the month of August and was up 1.1 per cent over 12 months.

Toward 2100 GMT, the euro was worth US$1.1156, down from US$1.1244 the day before while the US dollar bought 102.27 yen, down from 102.10. The pound fell to US$1.3004 from US$1.3240 on Thursday.

Central bankers in Washington and Tokyo are due to begin two-day meetings beginning Tuesday to review monetary policy, issuing decisions to which markets are keenly attuned.

"The CPI numbers helped the dollar," said Vassili Serebriakov of Credit Agricole.

"I don't think are really rethinking the Fed."

AFP