US Dollar Lifts on Strong Inflation Data
CPI Talking Points:
- Inflation ticking up to 2.5 percent on annual basis
- Core inflation remains at 2.3 percent
- US Dollar higher in response
The US consumer price index printed 2.5 percent on a year-over-year basis this morning, meeting expectations and rising from last month’s read of 2.3 percent. Price action in the US Dollar responded positively, with the DXY index strengthening following the news, now at 98.99. Core inflation, which excludes volatile food and energy prices, remained at 2.3 percent on an annual basis.
A sustained lift in inflation, should the trend continue, will likely bolster chances of a future rate increase from the federal reserve, or at least shift the central bank to a less dovish stance. Chair Powell has recently stated that he would need to see a significant move up in inflation before considering any rate hikes.
--Written by Thomas Westwater, Intern Analyst for DailyFX.com
Contact and follow Thomas on Twitter @FxWestwater
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.