FOREX-Dollar flat after more evidence of rising inflation

* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

(New throughout)
By Kate Duguid
NEW YORK, May 13 (Reuters) - The dollar held steady near
week highs on Thursday after the U.S. Labor Department reported
higher producer prices in April, further evidence that inflation
is rising in the United States.
The producer price index rose 0.6% in April after surging
1.0% in March. In the 12 months through April, the PPI shot up
6.2%. That was the biggest year-on-year rise since the series
was revamped in 2010 and followed a 4.2% jump in March.
Thursday's report follows data on Wednesday showing consumer
prices increased by the most in nearly 12 years in April. The
dollar rose on Wednesday to one-week highs as some investors
increased bets that the Federal Reserve could raise interest
rates sooner than the bank has forecast. But the move in the
dollar was relatively muted, suggesting many investors continue
to take Fed policymakers at their word.
U.S. Federal Reserve Vice Chair Richard Clarida said on
Wednesday that weak job growth and strong inflation in April had
not changed the central bank's plan to maintain loose monetary
policy. The dollar index =USD was last flat on Thursday at 90.739,
down from a week high hit earlier in the day of 90.909.
"So far the FX response has been fairly tepid and for good
reasons," wrote Alan Ruskin, macro strategist at Deutsche Bank.
While Ruskin does believe that the surge in inflation is
large enough that a full reversal in coming months does not seem
likely, he doesn't expect that a single month of data will
prompt an immediate shift in the Fed's positioning.
"Where does this leave the USD? Probably mildly firmer, but
without a clear Fed shift, struggling at recent dollar index
highs near 91.50, and the euro at a 1.1986/1.20 area of
support."
The euro EUR=EBS was slightly stronger on the day, last up
0.05% to $1.208. The Japanese yen was modestly stronger against
the dollar, last up 0.11% at 109.575 JPY=EBS .
The Australian dollar, which is seen as a proxy for risk
appetite, was up 0.10% at 0.773 versus the U.S. dollar, after
having its biggest daily drop since March on Wednesday.
In cryptocurrencies, bitcoin BTC=BTSP plunged 13% on
Wednesday after Elon Musk said in a tweet that Tesla Inc
TSLA.O would no longer accept the cryptocurrency for car
purchases.
Bitcoin however recovered some of those losses overnight and
was last up 1.96% at around $49,697 at 1132 GMT BTC=BTSP .
Bitcoin is still up around 30% from where it was just before
Tesla said on Feb. 8 that it had invested around $1.5 billion in
bitcoin and would accept it for payment in the near future.
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