Consumer Prices Accelerated in September

Consumer Prices Accelerated in September

Gold prices were little changed amid a steady dollar on Friday, halting a five-day rally as investors wait for key US inflation data for clues on the outlook for potential hikes in USA interest rates.

A majority of Fed rate setters believe inflation will trend higher in the coming months due to labour market tightness and the improving global economy, with a December rate hike seen by the market before the data print as virtually nailed on.

USA consumer prices recorded their biggest increase in eight months in September as gasoline prices soared in the wake of hurricane-related production disruptions at oil refineries in the Gulf Coast area, but underlying inflation remained muted.

The ICE U.S. Dollar Index DXY, -0.30% was fractionally higher at 93.0900, while a broader measure of the buck's strength, the WSJ Dollar Index BUXX, -0.33% moved down 0.1% to 86.36.

The dollar turned negative as sterling jumped to an eight-day high against the dollar with analysts citing a report in Germany's Handelsblatt newspaper that the European Union could offer Britain a two-year transitional Brexit deal.

The Fed has indicated it plans to raise interest rates in December.

European shares also rose to their highest level in almost four months, helped by some well-received corporate earnings updates.

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The Dow Jones Industrial Average fell 17.09 points, or 0.07 percent, to 22,855.8, the S&P 500 lost 2.1 points, or 0.08 percent, to 2,553.14 and the Nasdaq Composite dropped 2.41 points, or 0.04 percent, to 6,601.14. Core prices had been expected to rise by 0.2 percent.

The price index of a small basket in September 2017 compared to August 2017 was 100.7% and the overall increase since the beginning of the year (September 2017 compared to December 2016) has been 102.1%.

The pan-European FTSEurofirst 300 index rose 0.01 percent and MSCI's gauge of stocks across the globe gained 0.04 percent.

Sterling last traded at $1.3273, up 0.39 percent on the day.

Against the euro, the dollar fell 0.3% to $1.1864 and was 0.4% lower versus the pound at $1.3315.

Oil prices rebounded from earlier losses, although they were still down on the session, after the U.S. Energy Department reported a larger-than-expected decline in U.S. inventories and a falloff in weekly production.

Spot gold was almost unchanged at $1,293.76 an ounce at 0054 GMT after gaining for five straight sessions.