Dollar drops as inflation readout puts Fed policy course in view

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An employee of a bank counts US dollar notes at a branch in Hanoi, Vietnam May 16, 2016. REUTERS/Kham/File Photo

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WASHINGTON, April 12 (Reuters) – The dollar slid on Tuesday after U.S. inflation data showed consumer prices rose by 8.5% in March compared to a year ago, boosted by soaring gasoline, but tempered by less expensive used cars and trucks.

While the initial readout came in slightly hotter than analysts expected, with the U.S. consumer price index (CPI) posting the biggest monthly rise in consumer prices in 40 years, the data showed some signs that inflation may have peaked. Core CPI fell short of estimates, landing at 6.5%.

“There’s lots of positives that are suggesting that some of these extreme price surges could start to be abating,” said Edward Moya, senior market analyst at OANDA.

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That could suggest that the Federal…

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