WASHINGTON (dpa-AFX) - The U.S. dollar firmed against most of its major rivals on Thursday after data showing the nation's inflation rose more than expected in January, raising expectations that the central bank is likely to hike interest rate by 50 basis points in March.
The Labor Department said its consumer price index climbed by 0.6% in January, matching the upwardly revised advance seen in December. Economists had expected consumer prices to rise by 0.5%, matching the increase originally reported for the previous month.
With the slightly bigger than expected monthly increase, the annual rate of growth in consumer prices accelerated to 7.5% in January, the biggest spike since February of 1982.
The report showed core consumer prices, which exclude food and energy prices, also advanced by 0.6% in January, matching the increase seen in December. Economists had expected core prices to rise by 0.5%.
The annual rate of growth in core prices accelerated to 6% in January from 5.5% in December, showing the biggest jump since August of 1982.
Another data from Labor Department showed first-time claims for U.S. unemployment benefits dipped more than expected in the week ended February 5, falling to 223,000, a decrease of 16,000 from the previous week's revised level of 239,000.
Economists had expected jobless claims to dip to 230,000 from the 238,000 originally reported for the previous month.
The dollar index, which climbed to 96.00 after the release of the inflation data, dropped to 91.17 subsequently, but recovered to 95.72 as the day progressed, gaining nearly 0.25% from the previous close.
Against the Euro, the dollar is at $1.1413, firming from $1.1426.
The dollar is trading at $1.3544 against Pound Sterling, recovering from $1.3644.
The dollar is gaining nearly 0.5% against the Yen, fetching 116.08 of the Japanese currency per unit, compared to 115.54 yen a dollar Wednesday evening.
Against the Aussie, the dollar is at 0.7157, gaining from 0.7179. The Swiss franc is at 0.9269 against the dollar, easing from 0.9242, while the Loonie is at C$ 1.2727 a dollar, weakening from C$ 1.2674.
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