November 16, 2007	Friday	Ziqa’ad 05, 1428

LONDON, Nov 15: The euro slipped against the dollar here on Thursday following US inflation data that analysts said could make it more difficult for the Federal Reserve to cut interest rates.

The single European currency in late-day trade was at $1.4637 against $1.4645 late Wednesday in New York.

The dollar was meanwhile trading at 110.76 yen after 111.27 on Wednesday.

US consumer prices rose 0.3 per cent in October, partly as energy costs surged, the government reported.

The gain in the consumer price index (CPI), a key inflation gauge that tracks retail prices across America, was in line with the expectation of most analysts.

Core prices, which strip out volatile food and energy costs, rose 0.2 per cent and were also in line with most forecasts, the monthly Labour Department survey showed.

In annual terms the consumer price index was up 3.5 per cent, its highest reading in 14 months.

Strong inflation will make it harder for the Fed to cut interest rates again, following a reduction of 0.75 points since September, even though economic growth is expected to slow sharply in the coming quarters.

Paul Ashworth, senior US economist at Capital Economics, said the monthly increase in the CPI “is actually the calm before the storm” and predicted that annual inflation could hit a 16-year high of 5.0 per cent by the end of the year as gasoline prices continue to climb.

The pound meanwhile was also steady but at markedly weaker levels following soft retail sales figures.—AFP