The Currency Scene:
News, Events, and Stories about currency from around the world.

USD[1], CPI Price Analysis & News

  • US Core CPI Falls Short of Expectations
  • USD Under Pressure, Gold[2] Bouncing Back

US Core CPI Falls Short of Expectations

DATA RECAP: The headline rate rose 0.3% on the month below expectations of 0.4%, which saw the yearly rate print at 5.3%, matching estimates. The core reading rose 0.1% vs 0.3% expected, while the yearly rate also fell short of expectations at 4% vs 4.2%. Transitory factors that have been a focal point for much of the increase have begun to roll over as used cars saw a slight decrease of 1.5%, marking the biggest monthly drop since November 2016. Elsewhere, stick components such as shelter costs rose a marginal 0.2%. As such, this reinforces the Federal Reserves outlook that the inflation spike is expected to be transitory. Alongside this, with ISM Mfg. and Non-Mfg prices paid (Figure 1.) heading lower, risks to inflation is tilted to the downside.

US Inflation Components

US Dollar Drops, Gold Bounce Back on US CPI Dip

Source: BLS

Figure 1. US CPI vs Average ISM Manufacturing & Non-Manufacturing Prices Paid

US Dollar Drops, Gold Bounce Back on US CPI Dip

How to Trade After a News Release[3]

MARKET REACTION: The USD came under pressure across the board. Similarly, US yields have also dipped in the wake of the inflation report, while gold prices saw a slight bounce. However, given that the Fed acknowledges that they have already hit their taper condition for inflation making substantial progress, the impact of this report on the Fed’s outlook is limited. That said, with equity markets firmer, this will reign in those calls of stagflation.


US Dollar Drops, Gold Bounce Back on US CPI Dip

Source: Refintiv

DailyFX[4] provides forex news and technical analysis on the trends that influence the global currency markets.


Read more from our friends at Daily FX

Pin It

The Logo Story

currensceneFLOGO WHTsquareThough not the oldest form of currency, some form of shell money appears to have been found on almost every continent. The shell most widely used worldwide as currency was the shell of Cypraea moneta, the money cowry.

Visit the CurrenScene Media Page