US DOLLAR PRICE OUTLOOK: JUNE’S 5.4% CPI PRINT FUELS FED TAPER RISKUS Greenback value motion rockets greater as inflation surprises to the upsideH
US DOLLAR PRICE OUTLOOK: JUNE’S 5.4% CPI PRINT FUELS FED TAPER RISK
- US Greenback value motion rockets greater as inflation surprises to the upside
- Headline CPI got here in at 5.4% largely pushed by hovering used automotive costs
- DXY Index 0.5% stronger intraday amid intensified fears of Fed tapering
US Greenback bulls are steering the Buck sharply greater throughout Tuesday morning commerce. This comes within the wake of higher-than-forecast inflation knowledge simply launched. The CPI report for June confirmed annualized headline and core inflation at 5.4% and 4.5%, which topped expectations of 4.9% and 4.0%, respectively.
One other upward shock to inflation knowledge appears to be fueling energy throughout USD value motion as Fed taper bets ratchet greater. I famous in yesterday’s preview that we’d possible see the broader DXY Index spike greater if headline inflation topped 5.0%.
DXY – US DOLLAR INDEX PRICE CHART: 2-HOUR TIME FRAME (04 JULY TO 13 JULY 2021)
Chart by @RichDvorakFX created utilizing TradingView
The broad-based bid beneath the US Greenback has propelled the DXY Index about 0.5% intraday to the 92.65-price degree. That is approaching nearside technical resistance posed by a descending trendline and month-to-date highs. That mentioned, the most recent CPI report detailed that costs for used automobiles and vans accounted for greater than one-third of the rise in headline inflation. In actual fact, the used automobiles and vans value index soared 10.5% in June and 45.2% year-over-year.
These had been the very best readings on document since CPI knowledge was first collected again in 1953. Different major classes that contributed to the rise in inflation had been transportation companies like airline fares, meals, attire, and power prices. Whereas the hotter-than-expected inflation studying is unsurprisingly fueling an inflow of US Greenback energy resulting from fears of an accelerated Fed taper timeline, the central financial institution is prone to keep on with its transitory narrative. This might see US Greenback bears search for alternatives to fade current energy.
— Written by Wealthy Dvorak, Analyst for DailyFX.com
Join with @RichDvorakFX on Twitter for real-time market perception
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