March 13, 2018 / 1:45 PM / 2 months ago

FOREX-Dollar slides after in-line U.S. inflation data, Tillerson ouster

    * U.S. inflation data suggests gradual rate hike pace
    * Fed funds futures see lower chance of 4th Fed hike this
year
    * Trump fires Tillerson; dollar falls

 (Updates prices, adds comments, details, FX table, changes
dateline, byline)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, March 13 (Reuters) - The dollar fell against most
major currencies on Tuesday after U.S. inflation data for
February came in line with expectations, suggesting the Federal
Reserve remained on track to raise interest rates at a gradual
pace.
    The dollar also lost traction after U.S. President Donald
Trump fired Secretary of State Rex Tillerson and replaced him
with Central Intelligence Agency Director Mike Pompeo, marking
the biggest shakeup of the administration's Cabinet.

    Investors were bracing for a breakout number in U.S
inflation after a strong figure the previous month and when that
did not happen, the dollar pared some of its gains against the
yen and fell versus the euro, said John Doyle, director of
markets at Tempus Consulting in Washington. 
    The Labor Department said on Tuesday the U.S. consumer price
index rose 0.2 percent last month after jumping 0.5 percent in
January. Excluding the volatile food and energy components, the
CPI gained 0.2 percent after accelerating 0.3 percent in
January.
 
    "Today's unsurprising print should serve to confirm the
central bank's commitment to gradualism, keeping markets in a
much-appreciated 'Goldilocks' phase for a little longer," said
Karl Schamotta, director of global product and market strategy
at Cambridge Global Payments in Toronto.
    After the data, Fed funds futures data showed a lower chance
of a fourth rate hike this year.
    In midmorning trading, the dollar index fell 0.1 percent to
89.809, as the euro gained 0.2 percent on the day
to $1.2363.
    The dollar also slid against the Swiss franc and the
British pound, as well as the Australian and New
Zealand dollars.
    Tillerson's firing, coming a week after the resignation of
U.S. economic adviser Gary Cohn, also weighed on the dollar.
    "It's another sign of a problem in the Trump
administration," said Stan Shipley, strategist at Evercore ISI
in New York. "The turnover in this administration is high, so
this is another one."
    The greenback, however, did well against the yen, rising 0.5
percent to 106.90.
    The yen came under some pressure from a scandal involving
Prime Minister Shinzo Abe. It weakened by 0.3 to 0.5 percent
against other major currencies after Japan's ministry of finance
said on Monday it altered documents for a sale of state-owned
land linked to Abe's wife.
    
    ========================================================
    Currency bid prices at 9:36AM (1336 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.2363        $1.2332     +0.25%         +3.06%      +1.2385     +1.2315
 Dollar/Yen       JPY=        106.9200       106.4100    +0.48%         -5.10%      +107.2900   +106.2600
 Euro/Yen         EURJPY=     132.18         131.24      +0.72%         -2.22%      +132.4200   +131.1200
 Dollar/Swiss     CHF=        0.9448         0.9474      -0.27%         -3.01%      +0.9494     +0.9439
 Sterling/Dollar  GBP=        1.3961         1.3905      +0.40%         +3.31%      +1.3970     +1.3875
 Dollar/Canadian  CAD=        1.2845         1.2837      +0.06%         +2.11%      +1.2877     +1.2830
 Australian/Doll  AUD=        0.7888         0.7872      +0.20%         +1.10%      +0.7895     +0.7860
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1682         1.1688      -0.05%         -0.06%      +1.1698     +1.1679
 Euro/Sterling    EURGBP=     0.8854         0.8868      -0.16%         -0.32%      +0.8886     +0.8855
 NZ Dollar/Dolar  NZD=        0.7348         0.7294      +0.74%         +3.68%      +0.7354     +0.7293
 Dollar/Norway    NOK=        7.7395         7.7418      -0.03%         -5.70%      +7.7691     +7.7238
 Euro/Norway      EURNOK=     9.5716         9.5533      +0.19%         -2.83%      +9.5820     +9.5506
 Dollar/Sweden    SEK=        8.2109         8.2412      -0.13%         +0.11%      +8.2516     +8.1992
 Euro/Sweden      EURSEK=     10.1520        10.1656     -0.13%         +3.18%      +10.1680    +10.1420
 
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Richard Leong; Editing by Chizu Nomiyama and Jonathan Oatis)
  
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