The euro traded below $1.12 after Tuesday's U.S. inflation report, which showed core prices meeting a threshold Federal Reserve Gov. Christopher J. Waller had identified for considering a larger rate increase.
Trading Economics showed the euro near $1.1190 at about 9:16 a.m. ET (14:16 UTC), after the inflation figures were released at 8:30 a.m. ET (13:30 UTC). FXStreet reported it near $1.1220 at 6:52 a.m. ET (11:52 UTC). FXStreet had said the currency was already giving back earlier gains before the U.S. data came out.
The U.S. Bureau of Labor Statistics (BLS) reported that consumer prices rose 0.4% from September, following a 0.6% increase that month. Excluding food and energy, prices rose 0.3% for the third consecutive month.
Speaking before the release, Waller said he would support a 25 basis point rate increase in December even if inflation improved. He said policymakers should consider a 50 basis point increase if the monthly core reading came in around 0.3% or higher. Waller cited price increases across core goods and services and warned that a smaller move under that condition could put the Fed's credibility at risk.
The Fed held its target rate range at 3.75% to 4.00% on Oct. 28. Waller's comments set out his preference; the Fed has made no decision for December. EconoTimes previously covered his case for a December increase.
Inflation is also a concern for the European Central Bank. Eurostat estimated that annual euro-area inflation rose to 4.0% in October from 3.8% in September. The ECB held its deposit rate at 2.50% on Oct. 29 and said an energy shock could raise inflation while weakening growth. It said future rate decisions would depend on incoming data.
Eurostat's next flash inflation estimate is due Dec. 1. The Fed meets Dec. 8-9, the next U.S. CPI report is scheduled for Dec. 10, and the ECB's next policy meeting concludes Dec. 17.
