Forex: USD mixed against peers on CPI update
iNVEZZ.com Tuesday July 16th: Traders have started selling the USD despite the fact that the US Consumer Price Index for June came out today better than expected.
The Department of Labour reported less than an hour ago that prices rose by 1.8 percent in the June year, versus expectations for 1.5 percent. Month-on-month, prices were up 0.5 percent, against 0.3 percent expected. Core CPI, which strips out food and energy costs, rose by 1.6 percent over the 12 months to June and 0.2 percent m/m, matching estimates.
Following the CPI updates, US dollar pairings have received mixed support from the market:
• The euro has taken advantage, with the pair rising to 1.3137.
• Sterling has barely been affected, with the quote rising less than 40 pips to 1.5093, from the pre-update 1.5058.
• The yen received support, with traders pushing the pair to 99.23 just minutes after the release. The USD has since recovered to 99.56 but the rise lacks conviction.
The US dollar remains under threat of volatility as traders await Ben Bernanke’s testimony at a Congressional hearing on monetary policy tomorrow and speculation remains rife on the if’s and when’s of ‘tapering’ of the Fed fiscal stimulus programme.