May 13 (Reuters) - The dollar index slid on Tuesday as waning concerns about inflation and optimism about a growth revival following U.S-China trade talks lifted U.S. share prices.
U.S. consumer prices climbed a below-forecast 2.3% in the 12 months through April, the slowest pace in four years. The White House announced it will lower the tariff rate on small packages from China while China said it will lower its tariffs on U.S. goods to 10% for an initial 90 days starting on Wednesday. China also removed a ban on airlines taking delivery of Boeing planes. U.S. President Donald Trump and Saudi Crown Prince Mohammed bin Salman signed a strategic economic partnership agreement, including a $600 billion commitment from Saudi Arabia to invest in the United States. A number of U.S. technology firms announced artificial intelligence deals in the Middle East. Treasury yields firmed as shares rose while a few banks adjusted their Fed forecasts to reflect a more benign economic trajectory. In a social media post, Trump repeated his call for the Federal Reserve to lower interest rates, saying prices for gas, groceries and "practically everything else" are down.
EUR/USD recouped most of Monday's loss as risk tone improved. German investor morale rose more than expected in May. Dutch central bank chief Klaas Knot said the dollar will stay the world's key currency for some time. Despite its bounce, techs remain bearish below a sliding 10-DMA and 1.1200 resistance. The 55-day moving average 1.1030 is within striking distance. GBP/USD firmed toward 1.3302, the 21-day moving average. Cable was boosted earlier by hawkish comments from Bank of England Chief Economist Huw Pill while U.K. data showed Britain's jobs market cooled again last month.
USD/JPY fell below its Ichimoku cloud though the yen remains on its heels against other G10 currencies as risk tone improves and implied volatility sinks.
AUD/JPY rose nearly 1% to it highest level since March.
Treasury yields were up 2 to 6 basis points as the curve steepened. The 2s-10s curve was up about 2 basis points to +46.1bp.
The S&P 500 rose 1.02% fueled by gains in tech and energy shares.
Oil jumped 2.87% on improving demand prospects. Gold rose 0.4% while copper gained 2.12%.
Heading toward the close: EUR/USD +0.88%, USD/JPY -0.62%, GBP/USD +0.96%, AUD/USD +1.68%, DXY -0.78%, EUR/JPY +0.25%, GBP/JPY +0.33%, AUD/JPY +1.03%.(Editing by Burton Frierson Reporting by Robert Fullem)
