The Labor Department's inflation report released on Friday showed the US consumer price index rising 1.4% on the headline figure when compared with last year. Expectations were for an increase of 1.3%. The core CPI was up 2.20% compared to a year ago in January, marking the biggest increase since June 2012. Energy prices continued to remain a drag on inflation and on a monthly basis, inflation was largely flat. The surge in inflation data in January has rekindled forecasts for the Fed to keep up its hawkish stance, with the probability for a December rate hike rising to 43% from the previous 32%. The US dollar edged higher after the inflation data was released but soon gave back its gains towards the market’s closing hours. USDJPY remained weak, posting a second day of declines at 112.56. The pair opened today at 112.588 and is currently attempting to push higher, trading at 112.93 at the time of writing.
Dollar Falls as Investors Cut Long Positions
Daily Analysis - 22/02/2016