* Dollar index holds post-CPI gains
* Riskier currencies fall
* Weekly jobless claims due
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Updates prices, adds comments)
By Elizabeth Howcroft
LONDON, May 13 (Reuters) - The dollar held on to its gains
on Thursday and riskier currencies fell, in a continuation of
moves that started in the previous session when a surprisingly
large rise in U.S. consumer prices fanned inflation fears.
Data showed that U.S. consumer prices increased by the most
in nearly 12 years in April, sparking a "risk-off" move in
global markets: equities and riskier currencies fell while U.S.
Treasury yields rose. Market attention now turns to U.S. weekly jobless claims due
at 1230 GMT and retail sales numbers on Friday for guidance on
whether upward pressure on prices will persist.
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 was steady at 90.750 at 1123 GMT, compared
with Wednesday's high of 90.798 =USD .
"The inflation debate will drive the market for some time I
think, at least through the summer," said Timothy Graf, head of
EMEA macro strategy at State Street Global Markets.
"I think it's very early to dismiss this and it's also very
early to overreact and think this is a new regime change because
this was a number driven by components that have huge one-off
spikes.”
Graf said that he expected the dollar to strengthen in the
short term due to the risk-aversion in equity markets but that
over the next six months it has more potential to weaken.
The Australian dollar, which is seen as a proxy for risk
appetite, was down 0.2% at 0.7707 versus the dollar, extending
losses after having its biggest daily drop since March on
Wednesday.
The New Zealand dollar was also down 0.2% NZD=D3 . It
briefly rose after Prime Minister Jacinda Ardern said she was
exploring quarantine-free travel with other countries.
The euro was up 0.1% at $1.2079 EUR=EBS . The Japanese yen
was flat against the dollar, with the pair changing hands at
109.580 JPY=EBS .
State Street's Graf noted that FX implied volatility for
major currencies was little changed, even after the spot
currency market moves.
"It tells me the market doesn't quite believe this is going
to be a game-changer but if it is, it's only modest, at the
margins."
BITCOIN REBOUND
Bitcoin plunged 17% when Elon Musk said in a tweet that
Tesla Inc TSLA.O will no longer accept the cryptocurrency for
car purchases. The cryptocurrency dropped from around $54,819 to $45,700,
its lowest since March 1.
But it recovered overnight and was up 0.5% at around $49,697
at 1132 GMT BTC=BTSP . Ether, the second biggest cryptocurrency after bitcoin,
dropped 14%, partly recovered, then fell again, down 1.5% at
$3,755. Ether hit another record high on Wednesday and is up
around 440% on the year. 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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