U.S. dollar rebounds as wholesale inflation sours sentiment

NEW YORK, May 11 (Xinhua) -- The U.S. dollar firmed up in late trading on Thursday, as investors digested the latest U.S. wholesale inflation data and the Federal Deposit Insurance Corporation's (FDIC) proposal to levy big banks to replenish the deposit insurance fund.

The dollar index, which measures the greenback against six major peers, increased 0.56 percent at 102.0525 in late trading.

In late New York trading, the euro was down to 1.0918 U.S. dollars from 1.0976 dollars in the previous session, and the British pound decreased to 1.2512 U.S. dollars from 1.2622 dollars in the previous session.

The U.S. dollar bought 134.5150 Japanese yen, higher than 134.2610 Japanese yen of the previous session. The U.S. dollar was up to 0.8943 Swiss franc from 0.8895 Swiss franc, and it rose to 1.3489 Canadian dollars from 1.3382 Canadian dollars. The U.S. dollar increased to 10.3322 Swedish Krona from 10.2336 Swedish Krona.

The U.S. Bureau of Labor Statistics reported Thursday that the U.S. producer price index (PPI) increased by 0.2 percent in April month on month, lower than economists' expectation of a 0.3 percent growth. By contrast, the reading in March posted a month-on-month decline of 0.5 percent.

The U.S. PPI increased by 2.3 percent in April year on year, down from a 2.7 percent growth in March. It has been the lowest reading since January 2021. Economists had expected a 2.5 percent growth.

Excluding food and energy, the core PPI rose by 0.2 percent month on month, in line with economists' expectations, as against a decline of 0.1 percent in March. The core PPI rose by 3.2 percent year on year, down from a growth of 3.4 percent in March.

Although the U.S. PPI figures came in slightly lower than expected, the return to positive territory after a contraction in March is souring the mood across markets, said a note by Monex USA, a provider of foreign exchange, risk management, and international payment solutions.

The developments in the U.S. regional banking crisis also drove up risk aversion on Thursday.

The FDIC on Thursday proposed levying a special assessment on big banks with high levels of uninsured deposits to replenish the U.S. deposit insurance fund. The FDIC estimated that the failure of Silicon Valley Bank and Signature Bank earlier this year cost the insurance fund 15.8 billion U.S. dollars.

The U.S. Department of Labor reported Thursday that the new jobless claims increased to 264,000 in the week ending May 6, higher than economists' expectation of 245,000 and the prior week's 242,000.

As expected, the Bank of England increased interest rates by 25 basis points to 4.5 percent on Thursday.